Congratulations! If you’re a first-time home buyer in Texas, you’re about to make one of the biggest purchases of your life. Between mortgage rates, down payments, and closing costs, there’s a lot to think about. But here’s something many first-time homebuyers overlook until the last minute: homeowners insurance.

Insurance isn’t just another box to check, it’s essential protection for your investment and usually required by your lender. Yet most first-time home buyers know very little about homeowners insurance when they start the home-buying process.

How much insurance do you need? What does it actually cover? How much will it cost? How can you save money without sacrificing protection? These are critical questions, and getting the answers wrong can cost you thousands of dollars or leave you dangerously underinsured.

As a first-time home buyer in Texas, you face unique considerations. Texas weather brings hail, windstorms, and flooding. Texas insurance laws have specific requirements. Texas home prices and insurance rates vary dramatically by region.

This guide covers everything first-time homebuyers need to know about insurance in Texas for 2026. Let’s make sure you get the right protection at the right price.

Understanding Homeowners Insurance Basics

Before you start shopping, you need to understand what homeowners insurance actually is and what it does.

What Homeowners Insurance Covers

Homeowners insurance protects you from financial losses related to your home and property. A standard policy includes several types of coverage:

Dwelling coverage pays to repair or rebuild your home if it’s damaged by covered events like fire, wind, or hail.

Other structures coverage protects detached structures on your property like garages, sheds, or fences.

Personal property coverage covers your belongings inside the home, furniture, electronics, clothing, and more.

Liability coverage protects you if someone gets injured on your property or you accidentally damage someone else’s property.

Additional living expenses coverage pays for hotel and food costs if your home becomes uninhabitable due to covered damage.

What’s Typically Not Covered

Flood damage requires separate flood insurance, standard homeowners policies don’t cover flooding.

Earthquake damage needs separate coverage in most cases.

Normal wear and tear or maintenance issues aren’t covered, insurance is for sudden, unexpected events.

Certain types of water damage like sewer backups may require additional coverage.

Understanding these basics helps you know what protection you’re buying and where you might need additional coverage.

Why Homeowners Insurance Is Required

For first-time home buyers with mortgages, homeowners insurance isn’t optional, it’s mandatory.

Mortgage Lender Requirements

Your mortgage lender has a financial interest in your home until you pay off the loan. They require insurance to protect their investment.

If your home burns down without insurance, you still owe the mortgage, but the house is gone. Insurance ensures there’s money to rebuild, protecting both you and the lender.

Lenders typically require:

Dwelling coverage equal to at least the loan amount or full replacement cost of the home. Proof of insurance before closing, you can’t finalize your purchase without it. The lender listed as a “mortgagee” or “loss payee” on the policy. Continuous coverage throughout the loan term.

If you let your insurance lapse, the lender can purchase expensive “force-placed” insurance and charge you for it, often at much higher rates than you’d pay yourself.

Even Without a Mortgage

If you buy a home with cash and have no mortgage, insurance isn’t legally required. However, going without homeowners insurance is extremely risky.

Without insurance, you’d pay out of pocket to:

Rebuild after a fire or tornado. Replace everything you own after a burglary. Defend yourself in a lawsuit if someone gets hurt on your property. Find temporary housing if your home becomes uninhabitable.

The cost of homeowners insurance is minimal compared to the financial devastation of an uninsured loss.

Types of Homeowners Insurance Policies

Homeowners insurance policies come in different forms, and first-time home buyers should understand the options.

HO-3: The Most Common Policy

HO-3 policies are the standard for most homeowners. They provide:

“Open peril” coverage for your dwelling, meaning it’s covered against all risks except those specifically excluded.

“Named peril” coverage for personal belongings, covering only specific listed events.

This is usually the best balance of protection and cost for first-time homebuyers in Texas.

HO-5: Broader Coverage

HO-5 policies offer more comprehensive protection with “open peril” coverage for both dwelling and personal property. They cost more but provide better protection for your belongings.

HO-6: For Condos

If you’re buying a condo, you need an HO-6 policy (also called condo insurance). It covers your unit’s interior, your belongings, and liability, while the condo association’s insurance covers building exteriors and common areas.

Other Policy Types

HO-1 and HO-2 offer more limited coverage and are rarely used today.

HO-4 is renters insurance, not for homeowners.

HO-8 is for older homes where replacement cost exceeds market value.

For most first-time home buyers purchasing single-family homes in Texas, an HO-3 policy is the right choice.

How Much Homeowners Insurance Coverage You Need

Determining the right coverage amounts is crucial, too little leaves you exposed, too much wastes money.

Dwelling Coverage Amount

Your dwelling coverage should equal your home’s replacement cost, what it would cost to completely rebuild, not your home’s market value or purchase price.

Market value includes land value, which doesn’t need insurance since land doesn’t get destroyed. Replacement cost is just the building itself.

In some Texas markets, land is expensive and replacement cost is lower than market value. In others, replacement cost exceeds market value due to high construction costs.

Your insurance company or agent can help calculate appropriate dwelling coverage based on your home’s square footage, construction quality, and local building costs.

Other Structures Coverage

This is typically 10% of your dwelling coverage. For most first-time buyers, this is adequate unless you have particularly valuable detached structures.

Personal Property Coverage

Standard policies offer personal property coverage equal to 50-70% of dwelling coverage. For a home with $300,000 dwelling coverage, you’d have $150,000-$210,000 for belongings.

Assess whether this is enough for your possessions. Create a home inventory to understand your actual needs.

Liability Coverage

Most policies include $100,000-$300,000 in liability coverage. Many experts recommend at least $300,000, and $500,000 is even better.

Liability claims can be enormous if someone is seriously injured on your property. Don’t skimp here, the cost difference between $100,000 and $500,000 in coverage is usually modest.

Additional Living Expenses

This is typically 20% of dwelling coverage. It should be enough to cover temporary housing for several months while your home is being rebuilt.

Texas-Specific Insurance Considerations

First-time home buyers in Texas face unique insurance factors that don’t apply in other states.

Texas Weather and Insurance

Texas experiences severe weather that significantly impacts homeowners insurance:

Hail damage is widespread in many Texas areas, especially the I-35 corridor and North Texas.

Windstorm damage affects coastal areas and anywhere severe thunderstorms occur.

Tornadoes threaten parts of Texas, particularly in spring.

Hurricanes impact the Gulf Coast periodically, causing massive damage.

These weather patterns make Texas insurance rates higher than many states and mean you’ll likely file claims during your homeownership.

Wind and Hail Deductibles

Many Texas insurance policies have separate, higher deductibles for wind and hail damage, often 1-2% of your dwelling coverage instead of a flat dollar amount.

For a home with $300,000 dwelling coverage and a 1% wind/hail deductible, you’d pay $3,000 out of pocket for covered wind or hail damage before insurance kicks in.

Understand your policy’s deductibles clearly:

What’s your standard deductible for most claims (fire, theft, etc.)?

What’s your wind/hail deductible?

Is it a percentage or dollar amount?

Can you choose different deductible levels?

Higher deductibles lower your premium but increase out-of-pocket costs when you file claims.

Flood Insurance in Texas

Standard homeowners insurance doesn’t cover flood damage. Given Texas’s flood history, including Hurricane Harvey, first-time home buyers should seriously consider flood insurance.

If your home is in a high-risk flood zone and you have a mortgage, flood insurance is required. Even outside high-risk zones, flooding can happen anywhere in Texas.

Flood insurance is separate from homeowners insurance and comes through the National Flood Insurance Program (NFIP) or private insurers.

Coastal Property Considerations

If you’re buying coastal property, expect higher insurance costs and potential additional requirements:

Windstorm insurance through the Texas Windstorm Insurance Association (TWIA) may be necessary if standard insurers won’t cover coastal wind risk.

Hurricane deductibles may apply, similar to wind/hail deductibles but specifically for hurricane damage.

Elevation requirements and building standards affect both insurance costs and coverage availability.

Coastal insurance is significantly more expensive than inland properties due to higher risk.

How to Save Money on Homeowners Insurance

First-time home buyers often feel overwhelmed by costs, but there are legitimate ways to reduce insurance premiums without sacrificing needed coverage.

Shop Multiple Insurance Companies

Different insurance companies charge different rates for identical coverage. Always get quotes from at least 3-5 insurers before purchasing.

Insurance rates can vary by hundreds or even thousands of dollars annually between companies for the same home and coverage.

Use independent insurance agents who can shop multiple companies for you, saving time while ensuring you see competitive options.

Bundle Home and Auto Insurance

Most insurance companies offer significant discounts, typically 15-25%, when you bundle homeowners insurance with auto insurance.

For first-time buyers, bundling is one of the easiest ways to save. If your current auto insurance company offers competitive homeowners insurance, bundling makes sense.

Increase Your Deductibles

Higher deductibles substantially lower premiums. Moving from a $1,000 to $2,500 deductible might save $200-$400 annually.

Ensure you have adequate emergency savings to cover higher deductibles if you need to file a claim.

Improve Home Security

Installing alarm systems, deadbolts, smoke detectors, and other security features can qualify for discounts of 5-15%.

Some insurers offer discounts for monitored security systems that alert police or fire departments.

Maintain Good Credit

Your credit score affects homeowners insurance rates in Texas. Better credit means lower premiums.

As a first-time buyer, improving your credit before shopping for insurance can save significant money.

Ask About All Available Discounts

Insurance companies offer various discounts you must specifically request:

New home discount: Newer homes often get better rates.

Claim-free discount: No claims in recent years qualifies for lower rates.

Loyalty discount: Staying with one insurer for multiple years can save money.

Automatic payment discount: Setting up automatic payments saves a few dollars.

Paperless discount: Choosing electronic documents instead of paper saves money.

Consider Your Coverage Carefully

Don’t over-insure or under-insure. Dwelling coverage should match replacement cost, but insuring beyond that wastes money.

For personal property, accurately assess your belongings’ value. If you don’t own expensive items, the standard 50-70% of dwelling coverage may be excessive, though lowering this saves minimal money.

When to Buy Homeowners Insurance

First-time home buyers often wonder when in the buying process to purchase insurance.

Timeline for Insurance Purchase

Start researching insurance options as soon as your offer is accepted. You’ll need proof of insurance before closing, which can happen 30-45 days after offer acceptance.

Get insurance quotes 2-3 weeks before your scheduled closing date. This gives you time to shop multiple companies, compare coverage, and make informed decisions without rushing.

Most insurance companies can bind coverage quickly once you’re ready, often within 24-48 hours. However, shopping and comparing takes time.

Working With Your Lender

Your mortgage lender will specify their insurance requirements, including:

Minimum dwelling coverage amount.

Whether they accept your chosen insurance company.

How to list them as mortgagee on the policy.

Where to send proof of insurance.

Coordinate with both your insurance agency and lender to ensure all requirements are met before closing.

Binding Coverage

“Binding” coverage means the insurance is officially in effect. Your insurance should be bound effective on your closing date, not before or after.

If bound early and closing delays, you’re paying for insurance on a home you don’t own yet. If bound late, there’s a gap in coverage.

Your agent can time the binding appropriately once you have a firm closing date.

Additional Insurance First-Time Buyers Should Consider

Beyond basic homeowners insurance, first-time buyers should consider additional coverages.

Flood Insurance

We’ve mentioned this, but it bears repeating: flood insurance is crucial in many Texas areas.

Even if not required by your lender, consider flood insurance if:

You’re near water sources, creeks, or bayous.

Your area has experienced flooding historically.

You’re in a moderate-risk flood zone.

Your property is in a low-lying area.

Flood insurance costs vary but average $700-$800 annually in Texas for standard coverage.

Umbrella Insurance

Umbrella insurance provides additional liability coverage beyond your homeowners policy limits. It typically comes in $1 million increments and costs around $200-$400 annually for the first million.

For first-time buyers with significant assets or high-risk factors (pools, trampolines, etc.), umbrella insurance offers valuable protection against catastrophic liability claims.

Home Warranty

Home warranties aren’t insurance, they’re service contracts covering home system and appliance repairs or replacements.

Many first-time buyers purchase home warranties for peace of mind, especially for older homes. They typically cost $400-$800 annually plus service fees for each repair call.

Home warranties cover things homeowners insurance doesn’t, normal wear and tear on appliances and systems like HVAC, water heaters, and kitchen appliances.

Sewer and Water Line Coverage

Standard homeowners policies typically don’t cover sewer line or water line repairs outside your home’s foundation.

These repairs can cost thousands of dollars. Some insurance companies offer endorsements for this coverage, or you can purchase separate sewer and water line insurance.

Common Homeowners Insurance Mistakes First-Time Buyers Make

Avoid these common errors that cost money or leave you underprotected.

Buying Based Only on Price

The cheapest insurance isn’t always the best value. Consider the company’s financial strength, customer service reputation, and claims handling.

Saving $200 annually doesn’t help if the insurer denies legitimate claims or takes forever to process them.

Not Reading the Policy

Many first-time buyers never actually read their insurance policy. You need to understand:

What’s covered and what’s excluded.

Your deductibles for different types of damage.

Coverage limits for different categories.

Your responsibilities as a policyholder.

Under-Insuring the Home

Some buyers reduce dwelling coverage to save money, then discover after a major loss that they don’t have enough to rebuild.

Insure to full replacement cost, even if it exceeds your home’s market value. After a total loss, market value doesn’t matter, only rebuilding costs do.

Not Updating Coverage

As you make home improvements, buy expensive items, or change your situation, update your insurance.

A finished basement, new roof, or added pool all affect your insurance needs. Notify your agent of significant changes.

Forgetting About Personal Property

First-time buyers often focus on dwelling coverage and forget their belongings need protection too.

Create a home inventory with photos of your possessions. This helps you choose appropriate personal property coverage and makes filing claims easier if needed.

Ignoring Liability Coverage

Liability coverage is just as important as property coverage. Don’t accept the minimum, adequate liability protection protects your assets if you’re sued.

Working With Insurance Agents and Companies

Understanding how to work effectively with insurance professionals helps first-time buyers get better results.

Independent Agents vs. Captive Agents

Independent agents represent multiple insurance companies and can shop rates for you across many insurers.

Captive agents work for one company and only sell that company’s products.

Independent agents offer more options, making them often better for first-time buyers who need to compare multiple companies.

Questions to Ask Your Insurance Agent

What discounts do I qualify for?

What’s my deductible for different types of damage?

What’s specifically excluded from coverage?

How do I file a claim if needed?

What happens if I need to make changes to my policy?

How often should I review my coverage?

Does my policy offer replacement cost or actual cash value for personal property?

What’s the claims process like for this company?

Understanding Your Insurance Company’s Financial Strength

First-time buyers should check insurance company financial ratings through agencies like AM Best, Moody’s, or Standard & Poor’s.

Companies rated “A” or better are financially stable and likely to pay claims. Avoid companies with poor financial ratings, saving money doesn’t help if the company can’t pay your claim.

Texas First-Time Home Buyer Programs and Insurance

Texas first-time home buyer programs can help with down payments and closing costs, indirectly making insurance more affordable by reducing your overall financial burden.

Texas First-Time Home Buyer Assistance

Various Texas first-time homebuyer programs offer:

Down payment assistance.

Closing cost help.

Reduced interest rates.

Tax credits.

While these programs don’t directly pay for insurance, reducing your upfront costs and monthly payments makes budgeting for homeowners insurance easier.

Popular Texas first-time buyer programs include:

Texas State Affordable Housing Corporation programs.

My First Texas Home program.

Local city and county first-time buyer assistance programs.

Texas Department of Housing and Community Affairs programs.

Texas first-time home buyer grants and incentives vary by location and eligibility requirements. Research what’s available in your area.

How Assistance Programs Affect Insurance

If you use first-time home buyer programs, ensure your insurance meets program requirements in addition to lender requirements.

Some assistance programs have specific insurance requirements or mandate certain coverage levels.

Reviewing and Updating Your Homeowners Insurance

Insurance isn’t “set it and forget it.” Regular reviews ensure you maintain appropriate coverage.

Annual Policy Review

Review your homeowners insurance annually, ideally before renewal. Check:

Is your dwelling coverage still adequate for current construction costs?

Have you acquired valuable items needing additional coverage?

Are you getting all applicable discounts?

Has your home’s condition changed (new roof, updates, etc.)?

Are there new insurance companies offering better rates?

When to Contact Your Insurance Agent

Contact your agent whenever:

You make significant home improvements.

You buy expensive items like jewelry or art.

Your family situation changes.

You add a pool, trampoline, or other liability risks.

You install security or safety features.

You want to shop for better rates.

Proactive communication ensures your coverage always matches your needs.

Protect Your New Texas Home With the Right Insurance

Buying your first home in Texas is exciting, but protecting it properly is essential. The right homeowners insurance gives you peace of mind knowing your investment is protected.

Don’t let insurance become an afterthought or a last-minute scramble. Taking time to understand your options, shop carefully, and choose appropriate coverage ensures you’re protected without overpaying.

Ready to get homeowners insurance for your Texas home?

At Gettia, we specialize in helping first-time home buyers in Texas find the right homeowners insurance at competitive rates.

Why first-time buyers choose Gettia:

✓ Compare multiple insurers – We shop Texas insurance companies to find you the best combination of coverage and price.

✓ Expert guidance – Our team understands Texas-specific insurance requirements and challenges.

✓ First-time buyer specialists – We know this is new for you and take time to explain everything clearly.

✓ Fast quotes – Get homeowners insurance quotes quickly so you can focus on closing.

✓ Discount maximization – We help you find every discount you qualify for.

✓ No pressure – We provide information and options, not pushy sales tactics.

Get your free homeowners insurance quote at gettia.com or call us to speak with a Texas insurance specialist who can answer your first-time buyer questions.

Don’t wait until closing is days away. Visit gettia.com now to get started with your homeowners insurance and protect your Texas dream home.

Frequently Asked Questions for First-Time Home Buyers

How much does homeowners insurance cost for first-time buyers in Texas?

Texas homeowners insurance costs average $2,000-$2,500 annually statewide, but first-time buyers can expect significant variation based on location, home characteristics, and coverage choices. Dallas and Houston areas often run $2,000-$3,500 due to hail and weather risks, while San Antonio averages lower at $1,500-$2,500. Coastal properties cost significantly more at $3,000-$6,000+. Your actual cost depends on home value, age, construction type, deductibles, coverage amounts, credit score, and available discounts. First-time home buyers should budget accordingly and shop multiple insurers for competitive rates.

When should first-time buyers purchase homeowners insurance?

Start researching insurance options as soon as your offer is accepted. Get actual quotes 2-3 weeks before your scheduled closing date, giving you time to shop multiple companies without rushing. Most insurers can bind coverage within 24-48 hours once you’re ready, but shopping and comparing takes time. Your insurance should be bound effective on your closing date, not before or after. You’ll need proof of insurance to satisfy lender requirements before closing can finalize, so don’t wait until the last minute to address this crucial requirement.

What insurance coverage do first-time home buyers actually need?

First-time buyers need dwelling coverage equal to your home’s replacement cost (rebuilding cost, not market value), typically $100,000-$500,000+ in liability coverage to protect assets, personal property coverage for belongings (usually 50-70% of dwelling coverage), and additional living expense coverage for temporary housing after major damage. Many first-time buyers in Texas also need separate flood insurance due to Texas flooding risks. Consider higher wind and hail deductibles common in Texas policies. Don’t just accept minimum coverage, assess your actual needs and assets requiring protection.

Can first-time buyers get discounts on homeowners insurance?

Yes, first-time home buyers qualify for numerous homeowners insurance discounts. Common discounts include bundling home and auto insurance (15-25% savings), new home discounts for recently built homes, security system discounts (5-15%), claim-free discounts for no recent claims, automatic payment discounts, paperless discounts, and good credit discounts. Ask your agent about all available discounts specific to your situation. Some insurers offer special programs for first-time buyers. Shopping multiple companies helps you find insurers offering the best discounts matching your circumstances, potentially saving hundreds annually.

Do first-time buyers need flood insurance in Texas?

Many first-time home buyers in Texas absolutely need flood insurance. If your home is in a high-risk flood zone with a mortgage, flood insurance is mandatory. However, even outside high-risk zones, Texas flooding can happen anywhere, Hurricane Harvey proved this dramatically when 70% of flooded homes lacked flood insurance. Standard homeowners insurance doesn’t cover flood damage at all. Flood insurance costs average $700-$800 annually in Texas and provides crucial protection. Even if not required, seriously consider flood insurance if you’re near water, in areas with flooding history, or in low-lying locations.

What’s the difference between replacement cost and market value?

Market value is what your home would sell for, including land value. Replacement cost is what it costs to rebuild your home’s structure if destroyed. For insurance purposes, dwelling coverage should equal replacement cost, not market value. Land doesn’t need insurance since it can’t be destroyed. In some expensive Texas markets, land is valuable and replacement cost is lower than market value. In others, high construction costs mean replacement cost exceeds market value. First-time buyers should insure to replacement cost to ensure adequate funds to rebuild after a total loss.

How do wind and hail deductibles work in Texas?

Most Texas homeowners insurance policies have separate, higher deductibles for wind and hail damage, typically 1-2% of your dwelling coverage rather than a flat amount. For a $300,000 home with a 1% wind/hail deductible, you’d pay $3,000 out-of-pocket for covered wind or hail damage before insurance pays. Standard deductibles for other damage (fire, theft) remain lower, often $1,000-$2,500. This is unique to Texas and other hail-prone states. First-time buyers should understand these percentage-based deductibles and budget accordingly, as Texas hail damage is extremely common in many areas.

Should first-time buyers work with insurance agents or buy online?

First-time home buyers benefit from working with experienced insurance agents, especially independent agents who can shop multiple companies. Agents explain coverage options, help determine appropriate amounts, identify applicable discounts, and guide you through Texas-specific considerations like wind/hail deductibles and flood insurance needs. While online purchases work for experienced buyers, first-time buyers usually need personalized guidance to make informed decisions. Good agents don’t cost extra insurance companies pay their commissions. Choose agents with Texas expertise who take time to educate rather than just selling policies.