Texas commercial property insurance premiums: why they rose and what owners control

How much Texas premiums rose

A University of Texas at Austin study of more than 100,000 multifamily properties with agency commercial mortgage-backed loans found average commercial property insurance premiums grew more than 15% a year from 2019 to 2024, and nearly 30% in 2023. Texas, Florida, Louisiana and California saw some of the largest increases, and insurance roughly doubled as a share of rental income.¹

Commercial fire and allied lines cover fire plus windstorm, hail and other perils for businesses. Commercial multiple peril policies package property with liability, crime and boiler coverage. Written premium tracks both price and the amount insured, so these totals rise with rates and with building values.¹¹

Why premiums rose

• Hail. Texas had 902 hail events with stones 1 inch or larger in 2025, more than twice second place Kansas (375), out of 5,432 in the US. It also led in 2024, with 878.^2,12
• Storm losses. Severe convective storms (hail, tornadoes and straight-line winds) caused North American insured losses of $59 billion in 2023, $52 billion in 2024 and $46 billion in 2025, at 2025 prices: the three costliest years on record. Swiss Re attributes 80% of the long-term growth in these losses to exposure, meaning rising asset values and building in exposed areas.³
• Reinsurance. Insurers buy their own catastrophe cover and pass its cost on. The Guy Carpenter US Property Catastrophe Rate on Line Index, a measure of that cost, rose a preliminary 35% for January through July 2023 renewals, and commercial premiums rose most in states whose insurers rely more on reinsurance.^1,4
• Rebuilding costs. Swiss Re puts US property reconstruction costs flat since March 2025 but still 37% above December 2019. Higher replacement cost values raise the premium even when the rate holds.³
• Risk pricing. Before 2018, commercial insurance costs were only weakly related to disaster exposure; since then, insurers have priced expected and actual disaster losses into commercial property.¹

Where prices stood in 2026

The Guy Carpenter US property catastrophe reinsurance index fell 16% at the mid-year 2026 renewals. Marsh measured US property rates for its clients down 13% in the second quarter of 2026 and 10% in the third, with catastrophe-driven programs (typically over $1 million in premium) down 13%. Brokers in a Council of Insurance Agents and Brokers survey reported commercial property premiums down 6.3% on average in the second quarter of 2026.^13,5,14

Softer prices are not permanent. Marsh notes that one or more large events could slow or reverse the decline.⁵

What owners control at renewal

• Property data. Insurers price commercial buildings on construction, occupancy, protection and exposure (COPE): construction type, roof geometry, covering and age, sprinklers and alarms, the local fire protection class, neighboring buildings and natural hazards. Complete, current data gives the underwriter less to guess at.
• Documentation and values. In the third quarter of 2026, accounts with well documented risks and favorable loss records secured stronger outcomes, Marsh reported, and insureds with good valuation practices were best positioned.^5,7
• Impact-resistant roofing. Per TDI's page dated February 24, 2023, Texas insurers may credit roof coverings tested for impact resistance and rated Class 1 to 4, with Class 4 receiving the highest credit. Each insurer sets its own credit amounts, accepted tests and paperwork, and the Texas Windstorm Insurance Association requires UL 2218 testing and TDI form PC068.⁹
• FORTIFIED Commercial. This IBHS standard has three levels: FORTIFIED Roof, Silver (adding parapets, doors and windows) and Gold (a continuous load path through the structure), plus an optional hail supplement. It covers business, mercantile, moderate and low hazard factory and storage, and similar buildings, plus apartments and hotels. IBHS issues the certificate after an independent evaluator verifies the work, and says lower risk may help reduce insurance costs.^10,15
• Deductibles. A higher deductible lowers the premium and raises what the owner pays after a loss. In the second and third quarters of 2026, insurers also competed on terms, offering catastrophe deductible caps and lower wind and hail deductibles.^5,14,8
• Loss history. In Marsh's global index for the third quarter of 2026, loss-affected and catastrophe-exposed accounts generally saw weaker results. The Texas rule that keeps natural-cause claims out of renewal surcharges, Insurance Code 551.107, applies only to standard fire, homeowners and farm or ranch owners policies.^7,16
• Scale and shopping. Larger owners and those with diversified, lower-risk portfolios get lower insurance costs on similar properties. Rates and underwriting standards vary by company, and a cheaper quote may carry less coverage.^1,8

Most evidence for mitigation discounts comes from homes. In Alabama, homes built or retrofitted to FORTIFIED saw claim frequency fall 55 to 70% and loss ratios up to 72% lower than conventional construction. On September 16, 2026, TDI urged insurers writing residential property to offer actuarially supported discounts for FORTIFIED Home and impact-resistant roofs; the bulletin is addressed to residential insurers and speaks only of homeowners.^3,17

Texas renewal notice rules

An admitted Texas insurer that will not renew a commercial property policy must mail or deliver written notice to the first-named insured at least 60 days before it expires; if notice comes later, coverage continues until the 61st day after the notice. A renewal that reduces coverage or changes conditions or the insured's duties, unless the insured asked for or agreed to the change, needs a conspicuous, plain-language notice of each change at least 30 days before the renewal date.¹⁶