'Hurricane Season From Hell' Could Make Parts of Texas Uninsurable

A "hurricane season from hell" this year, as forecasting service WeatherBELL Analytics described it, could upend the vulnerable Texas home insurance market, experts told Newsweek.

Weather experts at the National Oceanic and Atmospheric Administration (NOAA) expect this year's Atlantic hurricane season—which officially kicked off on June 1 and will end on November 30—to be particularly active. They forecast a range of 17 to 25 named storms, of which eight to 13 are expected to become hurricanes, four to seven of which could be major.

Read more: Find the Right Type of Savings Account for Your Needs

"I fully expect to see a landfalling storm in Florida this year, with another in Texas or Louisiana, but I am hopeful that it is not a name we will remember like Andrew, Katrina, Ike or a few others," Charles Nyce, department chair and a Dr. William T. Hold associate professor of risk management and insurance at Florida State University, told Newsweek.

"A really bad storm, or a series of storms can be extremely detrimental to the private property insurance markets in all of those states," he added.

While homeowners in the Lone Star State are not the worst off in the country, they're currently paying the fourth-highest home insurance costs in the country, according to digital insurance agent Insurify. The company reports that the average annual premium in 2023 was $4,456 in Texas, much higher than the national average of $2,377, and lower than only Florida ($10,996), Louisiana ($6,354) and Oklahoma ($5,444).

Read more: Emergency Funds: How to Build One and Where to Keep It

Already-high home insurance premiums could skyrocket in Texas should the state get hit by devastating storms or hurricanes this year—especially as only about 14 percent of the state's homeowners are covered by flood insurance, according to Insurify.

There are about 5.3 million home insurance policies in Texas, but only about 753,000 federal flood policies. Last year, the state reported $400 billion in nature-related damages. Houston, Texas, is currently one of the most flood-prone metropolitan areas in the country.

"It's possible that the highest-risk areas will become uninsurable," Betsy Stella, vice president of Carrier Management & Operations at Insurify, told Newsweek in a written statement. "However, where there's demand, typically a supplier will appear. The question will be, at what cost?"

Read more: Average Savings Account Rates

The fast growth of property is leading some private insurers to question whether they have underestimated severe climate risks, Benjamin Collier, a risk management and insurance professor at the Fox School of Business at Temple University, told Newsweek.

"While insurers recognize that climate risks are increasing, the leading risk models cannot determine exactly how much they have grown. A destructive hurricane season would contribute to a view that climate risks are growing faster than insurers thought," he said.

When insurers cannot measure a severe risk precisely, they have "a common playbook," Collier explained.

"Dramatically raise premiums, ration coverage to high-risk customers, or exit the market entirely," he said. "We have seen this before in insurance markets for terrorism, cyber and earthquake risks, and it is playing out in the home insurance market today."

According to Stella, it's likely that premiums will continue to increase into 2025 "as natural disasters like hurricanes only grow more frequent and damaging," she said. "Texas homeowners should be aware of how climate risks might affect their insurance costs in the future. They could face fewer insurance options in the marketplace, similar to Florida."

To mitigate future damages, Stella recommends Texas homeowners install weather-proofing features like impact-rated windows and shutters.

"Homeowners should inspect their roof regularly to make sure it is in good condition," she added.

Are you a Texas homeowner concerned about how this year's hurricane season might affect your insurance premiums? Contact g.carbonaro@newsweek.com.