Home Insurance Rates Set to Jump 10% for Texans on State’s FAIR Plan

Texans who get their homeowners insurance through the state’s insurer of last resort will see their premiums increase this year. Texas Commissioner of Insurance Cassie Brown’s office approved a 10% increase for the Texas’s Fair Access to Insurance Requirements (FAIR) Plan. The rate increase will take effect on Aug. 1 and affect all new policies and the renewal of existing policies.

The increase affects homeowners, condominium, tenant, and dwelling policies. The FAIR Plan Governing Committee has historically limited rate increases to 10%. Here are the statewide increases:

Policy Category	Percentage Increase
Tenant	8.4%
Dwelling - Fire	10%
Dwelling - Extended Coverage	9.5%
Homeowners	10%
Condominium	10%

Increases can vary based on location. For example, tenants with a FAIR Plan policy in the Dallas-Fort Worth area will see a 10% rate increase upon plan renewal, while tenants living in north or northwest Texas will only see an increase of 2.1%.

The path to an increase

The FAIR Plan filed the request for an increase on Dec. 28, 2023, and the Texas Department of Insurance (TDI) had 60 days to review the plan with the option to extend that review period by 30 days.

TDI extended that deadline at the end of February and approved the increase at the end of March, to take effect Aug. 1.

“FAIR Plan generally files new rates for approval with the Texas Department of Insurance each year,” Aaron Taylor, senior legislative and external affairs specialist with the Texas FAIR Plan Association, told Insurify. “Texas FAIR Plan’s goal is to set rates in an amount sufficient to carry all claims to maturity and to meet all expenses incurred in the writing and servicing of the business.”

What’s next? Costs continue to rise

FAIR Plans began in the 1960s as a way for property owners to purchase insurance coverage in markets where they had few options. And as the insurance market continues to evolve in the face of severe weather disasters, the plan’s role may become more important.

Because of the legally mandated cap on increases, FAIR Plan administrators couldn’t request the percentage increases they said the current market conditions in Texas indicate. Statewide indicated changes, included in the December request for a rate increase, show that the approved adjustments to FAIR Plan rates are falling behind market conditions.

Policy Category	Statewide Indicated Change
Tenant	21.9%
Dwelling - Fire	38.5%
Dwelling - Extended Coverage	12%
Homeowners	15.5%
Condominium	49.5%

And as the gap between indicated changes and the plan changes widens, consumers can expect to face new, more expensive rates to fill the gap.