The second-biggest state after California, Texas is famous for its scorching hot weather, BBQ, live music, and hundreds, if not thousands, of landmarks. Home to over 90 million people, the Lone Star State, however, has one thing that they can hardly brag about: insurance.
As much as 18.4% of Texans do not have health insurance, which is two times more than the average 9.2% across the U.S. and three to four times more than in the top-5 healthiest states: Massachusetts (3%), Rhode Island (4.1%), Hawaii (4.2%), and Vermont (4.5%), and Minnesota (4.9%). Almost one in five Texans remains uninsured, and that’s even despite the fact that the overall nation’s insurance rate decreased dramatically after the Affordable Care Act (ACA) was put into force on March 23, 2010.
Not only was Texas rightfully given the title of the ‘unhealthiest’ state, but Texans had – and still have – to face numerous health disadvantages, such as premature death, higher mortality rates, low-quality preventive medicine, and, of course, exorbitant medical bills for those uninsured.
Now, it’s clear that the insurance market is much broader than just health insurance. Let’s zoom out so that you can understand which specific coverage you miss if any.
So, all existing policies inevitably fall into one of the two major insurance categories: life insurance and non-life insurance.
The game of probabilities is just as hard and unpredictable as the game of life itself – and it goes without saying that you and only you are responsible for your insurance choices – but let’s just name and then elaborate on the most popular insurance coverages that you may need in Texas: health insurance, life insurance, car insurance, home insurance, renters insurance, flood insurance, gap insurance, and title insurance.
Before we start, though, let’s mention that you can get tons of information on most types of coverage available in Texas on the Texas Department of Insurance (TDI).
As drug costs are rising and doctors and nurses are paid more, healthcare in the U.S. is getting more and more expensive. If a one-time visit can cost a few hundred dollars, a few days’ stay in a hospital can empty your pocket.
Depending on your age, health, occupation, and other factors, there are at least five ways to get health insurance in Texas:
Besides, you can take advantage of your spouse’s healthcare plan, your parent’s plan (until age 26), or one of the alternative plans.
The cost of health insurance in Texas varies depending on the plan, the number of people covered, etc., but it wouldn’t be far-fetched to say that you can get basic health insurance coverage for less than $500 per person.
Amounting to $278 billion in Texas and not being a must-have type of insurance, life insurance can help your family financially after you die. From burial costs to living expenses to education of your children and more…sometimes you have to be pragmatic.
Before buying life insurance in Texas, check whether it has a free lock period (you usually have 10 more days to think before committing to the policy), grace period (30 penalty-free days to pay after a due date has come), as well as how much time you will have to settle a claim.
Premium-wise, the average cost of life insurance is about $360 a year, but then again, multiple factors – age, health condition, habits, etc. – affect the actual quote. For example, the premium may rise by about 30% as you’ve aged from 30 to 40.
The three most popular life insurance companies in Texas – the ones with a market share exceeding 5% – are Northwestern Mutual, New York Life, and Lincoln Financial.
While only about 75% of the drivers in the U.S. have car insurance, there’s no way around it in Texas, where car insurance is mandatory. Vehicle owners have to have liability coverage (injuries caused to third parties in an accident) and property coverage (physical damage to the cars involved in an accident).
If you want to save your time, you can just use the Texas car insurance rating table and choose State Farm or any other company from the top, but we’d still recommend you go through the next steps:
The average annual price of full coverage auto insurance in Texas is slightly above $1,500.
Even though Texas doesn’t require gap insurance, it may come in handy in case your vehicle is stolen or totaled, and especially so if your loan is bigger than the actual value of your car. Gap insurance pays the difference between the actual value of your car and the current balance on your loan or lease.
The other common cases include:
The average annual price of gap auto insurance is about $200. There are about three dozen gap insurance companies in Texas, the cheapest of which are Progressive and Clearcover.
With over 11.2 million housing units, valued at about $170,000 on average, Texas does have some peculiarities when it comes to homeowners insurance.
For example, in Texas, you do want to insure against hurricanes. In 2017, Hurricane Harvey cost over $125 billion to Texans. The other common claims include damage from thunderstorms, fire, water, and burglary.
Other than hurricanes, there are three most popular home coverages in Texas:
However, it may also be wise to consider wind coverage, floor coverage, leakage coverage, and other narrow-focused types of coverage that may pertain to your particular case.
The average annual cost of homeowners insurance is about $1,800. The bigger home insurers are USAA, State Farm, and Allstate.
One of the most common misconceptions about homeowners insurance is that it includes flood insurance. No, a standard homeowners policy doesn’t include flood coverage – you have to buy this coverage separately. But is it worth it?
To understand whether it is reasonable to pay up to $800 a year for flood coverage – that’s how much it costs in Texas – you have to know whether your location is prone to floods. The lion’s share of U.S. countries was flooded at least once, but there’s always a chance that your location is a lucky exception.
Renters insurance is not mandatory in Texas, but some landlords may not let you move in unless you provide proof of renters insurance. On top of that, it’s just a good idea to protect your personal items (landlord’s insurance won’t cover your belongings).
Renters insurance covers personal property, loss of use (costs associated with a temporary inability to live in the house because of damages to the building), and liability, but it doesn’t cover floods.
The average price of renters insurance in Texas is about $200, although the range varies depending on your specific location, coverage limits, and deductible. Renters insurance in Texas is provided by the same companies that provide homeowners insurance, so the list of most popular renters insurance brands looks just the same: USAA, State Farm, and Allstate.
When you buy a house, you want it to be crystal clean – that is, free from loans, debt, and other financial obligations. Unfortunately, it’s not always the case. Sometimes debts and issues can drag along for years, passing from the previous to the next homeowner.
There are two types of title insurance: lender’s insurance (protects the financial part of the deal, that is, the payer and the bank) and owner’s insurance (protects the homeowners).
More often than not, the buyer pays for the lender’s insurance and vice versa. It is considered courteous in Texas.
Price-wise, the rates of title insurance in Texas are almost uniform (barring fees) across all insurance providers. To estimate how much your title insurance may cost, you can use, for example, this or any other title policy price online calculator.
Insurance agents don’t make millions overnight, but even the average salary of an insurance agent – about $51,000 a year – may be a reason enough to get a license in Texas.
As an insurance agent, you will select, customize, and sell policies, as well as you will settle insurance claims, streamline the payment process, and calculate risks. If you feel like becoming an insurance agent, then you can follow this four-step path:
In Texas, claims adjusters make slightly less than on average in the U.S. – about $46,000 compared to roughly $50,000 – but that doesn’t make the job any less relevant or wanted.
As a claims adjuster, you will investigate claims to determine whether the insurance company you represent is liable and to which extent. To become a claims adjuster, you have to be communicative and stress-resistant.
The algorithm for receiving a claims adjuster license is similar to that of becoming an insurance agent, except for claims adjusters required to complete a 40-hours prelicensing course.
Oleksandr is an expert in deep research. He covers various insurance topics across verticals, adopting to every local law.
