By Stephanie Simmons, Nacogdoches Realtor
As a Realtor here in Nacogdoches, I’ve had the privilege of guiding countless buyers through the exciting process of purchasing a home. But lately, I’ve noticed a troubling trend that’s catching many of my clients off guard: delays in closings due to unexpected increases in homeowners insurance costs. Over the past few months, I’ve seen buyers—who thought they had their finances all figured out—scramble at the last minute because they didn’t anticipate how much more they’d need to shell out for insurance compared to previous years. It’s a wake-up call for anyone looking to buy a home in Texas, and it’s why I’m urging homebuyers to factor these rising costs into their budgets from the get-go—and to start shopping for their insurance binder much earlier in the process.
Why Are Homeowners Insurance Costs Skyrocketing in Texas?
If you’ve bought a home in Texas recently or are in the market now, you’ve likely noticed that homeowners insurance isn’t as affordable as it used to be. Here in East Texas, we’re not immune to the statewide trend of premium increases that have been climbing steadily over the past few years. But why is this happening?
First, Texas is no stranger to wild weather. From hailstorms tearing through roofs in Nacogdoches to hurricanes battering the coast and freezes like the one we saw in 2021, insurance companies have been hit hard by claims. These natural disasters aren’t just one-off events anymore—they’re becoming more frequent and more expensive. When insurers pay out billions to rebuild homes, they turn around and raise premiums to cover their losses. In fact, Texas has seen some of the highest insurance rate increases in the country, with premiums jumping over 50% in the last five years alone.
Second, the cost to repair or rebuild a home has shot up. Inflation, supply chain hiccups, and labor shortages have driven up the price of lumber, shingles, and just about everything else needed to fix a house. Insurers have to account for these higher replacement costs, which means higher premiums for homeowners.
Finally, some insurance companies are pulling back from Texas altogether. Big names like Progressive and Farmers have scaled back or stopped offering new policies here because the risks—and losses—are just too high. With fewer options, the companies still writing policies can charge more, leaving buyers with sticker shock when they see their quotes.
Budgeting for Insurance: Don’t Get Caught Off Guard
Here’s the thing: when you’re budgeting for a home purchase, it’s easy to focus on the big numbers—the down payment, the mortgage payment, the closing costs. But homeowners insurance? That often feels like an afterthought. I’ve had clients tell me, “Oh, I figured it’d be about the same as my last house,” or “I didn’t think it’d be *that* much more than a few years ago.” Then, a week before closing, they get their insurance quote and realize they’re short hundreds—or even thousands—of dollars. Suddenly, the dream home they’ve been working toward is at risk because they can’t cover the upfront premium required at closing.
That’s why I’m stressing this to every buyer I work with: homeowners insurance isn’t a small line item anymore. In Texas, it’s a major expense that deserves a front-row seat in your budgeting process. Before you even start house hunting, talk to your lender or an insurance agent to get a ballpark estimate based on the type of home you’re looking for and its location. Then, build that into your financial plan. It might mean adjusting your price range or setting aside extra cash reserves, but it’s better to know now than to be blindsided later.
Shop for Your Insurance Binder Early—Here’s Why
Traditionally, buyers don’t start shopping for homeowners insurance until the week of closing. After all, you’ve got inspections, appraisals, and negotiations to worry about—insurance feels like something you can tackle at the end. But with costs rising and insurance options shrinking, that last-minute approach is causing headaches—and delays.
Once your inspections are done, you’ve got a clear picture of the home’s condition and any potential risks (think old roofs or outdated electrical systems) that could affect your insurance rates. That’s the perfect time to start shopping for your insurance binder—a temporary proof of coverage that your lender requires before closing. Here’s why doing it right after inspections makes sense:
- **More Time to Compare Quotes**: Insurance rates can vary wildly between companies. By starting early, you can reach out to multiple providers, explore discounts (like bundling with auto insurance or installing safety features), and find the best deal that fits your budget. Waiting until the last minute leaves you scrambling and settling for whatever’s available.
- **Avoid Surprises**: If an insurer flags something from the inspection—like a roof nearing the end of its life—you’ll have time to negotiate repairs with the seller or adjust your budget. I’ve seen closings delayed because buyers didn’t realize their premium would double due to an issue uncovered in the inspection report.
- **Secure Coverage in a Tight Market**: With some insurers pulling out of Texas, it’s not a given that you’ll find coverage quickly. Shopping early gives you a head start, especially if you need to turn to options like the Texas FAIR Plan for high-risk properties.
- **Peace of Mind**: Closing day is stressful enough without worrying about whether your insurance will come through. Getting your binder lined up ahead of time lets you focus on the excitement of moving into your new home.
A Nacogdoches Perspective
Here in Nacogdoches, we’re lucky to have a tight-knit community and a real estate market that’s still approachable compared to the big cities. But even in our corner of East Texas, insurance costs are climbing. Whether you’re buying a historic charmer downtown or a newer build out by the lake, you need to be prepared. I’ve seen too many deals teeter on the edge because buyers underestimated this expense, and I don’t want that to happen to you.
My advice? As soon as your offer is accepted and inspections are scheduled, start talking to insurance agents. Get quotes lined up once you have the inspection report in hand. Work with your lender and me to make sure everything aligns. It’s a small shift in timing that can save you a world of stress—and keep your closing on track.
Let’s Get You Home
Buying a home is one of the biggest investments you’ll ever make, and I’m here to help you navigate every step—including the unexpected ones like rising insurance costs. If you’re thinking about purchasing a home in Nacogdoches or anywhere in East Texas, let’s sit down and crunch the numbers together. We’ll factor in insurance from the start and make sure you’re ready for closing day, no surprises attached. Give me a call—I’d love to help you find your perfect place and get you across the finish line!
*Stephanie Simmons is a dedicated Realtor serving Nacogdoches and the surrounding East Texas area, committed to making your homebuying journey smooth and successful.*