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By |Published On: September 2, 2016|Categories: Insurance Advice, Texas|

Texas’ insurance market is the world’s 12th largest based on premium volume, and 400 insurance companies are headquartered in the Lone Star State, according to the Insurance Journal. These range from the very large, such as USAA, to specialty companies, like Tokio Marine, which started out in aviation covering antique warbirds, corporate jets, and even homemade private planes. Just about any kind of insurance coverage you need, you can get from a Texas-based company. But first, some history.


A Brief History of Insurance in Texas

In the beginning, almost all Texas insurance policies were written by companies based in other states or even in other countries. Shady insurance schemes proliferated. In 1874, only four of the 61 companies selling insurance in Texas were based in the state. The Texas carriers specialized in fire and marine insurance but faced stiff competition from financially stronger out-of-state companies.

In 1876, the Texas legislature founded the Department of Insurance, Statistics and History. The overburdened commissioner was tasked with serving as state librarian, state historian, superintendent of public grounds and buildings, compiling statistics on Texas’ population and wealth, and managing all insurance-related duties.

The Texas insurance biz proliferated in the next quarter century. The year 1900 ended with almost $10 million in premium income for 138 Texas-based insurance companies. By 1907, insurance and banking merged into one government department. The legislature created the Fire Insurance Rating Board in 1909, which was responsible for preventing rate discrimination. Insurance didn’t get its own department, separate from banking, until 1923.

The Texas Insurance Code codified insurance laws in 1951. Later that decade, insolvency scandals rocked the state’s insurance industry. The legislature passed more than a dozen insurance-related bills to strengthen and solidify the industry. The State Board of Insurance was created in 1957. The role of commissioner of insurance and the organization of related departments has shifted in the years since. Legislation continues to help consumers have reliable insurance options while encouraging insurers to expand their business in Texas.

Top Texas Insurance Companies

Nowadays, the Texas Department of Insurance provides a list of the top 40 companies (in terms of market share) Texans rely on for homeowners, auto, workers comp, life insurance, accident and health, and more.

USAA – The Largest Texas Insurance Carrier

USAA InsuranceUSAA, headquartered in San Antonio is the largest insurance company hailing from Texas, with offices worldwide. Although USAA specializes in insuring US military and families only, it tops the list for Texas homeowners (top 5) and auto insurance (top 10).

Texas Mutual Insurance Company

texas mutual insuranceFor worker’s compensation, the winner is overwhelmingly local. Austin based Texas Mutual Insurance Company has 40 percent of the market. Texas is the only US state to make worker’s comp optional, causing most large carriers to leave the market. Texas Mutual supports many state charitable causes, including the Blood Center of Central Texas and Dallas Children’s Advocacy Center as well as its own scholarship program.

Home State County Mutual Insurance Companyhome state insurance

Earning fifth on the Texas list of top insurers for auto insurance, Home State County is headquartered in Waco. Although Texas based, it earned only 4% of the auto policies in Texas, with most of the market going to large national companies.

Texas Farm Bureau

For 50 years, Texas Farm Bureau has protected farmers from drought and low yields, in addition to auto, home, life and health coverage. It earned 3% of the market for homeowners, and 4% for auto insurance in Texas.

Small & Specialty Texas Insurance Carriers

Texas is also home to insurance carriers you are unlikely to have heard of, either due to size or niche insurance products. Gracy Title now known as the Stewart Title Guaranty Company has 17% of the market and is recognized as the first and oldest title company in Texas.

Republic GroupHettler is proud to sell insurance policies from The Republic Group, which is based in Dallas Fort-Worth. The Republic Group has sold auto, property and commercial insurance to Texans for 100+ years. Although local, Republic Group is small and took only half a percent of the market for homeowners.

Hettler also sells National Farm Life, a Fort Worth based company that specializes in burial and life insurance products.

American National Insurance Company is based in Galveston, TX and offers life insurance, specialty health, auto and property coverage. As of 2014, it held 1.5% of the market for life insurance in Texas.

texas windstorm insuranceTexas Windstorm Insurance Association is a private/public carrier offering coverage for hurricanes and hail damage to homeowners on the gulf coast.

National Insurance Carriers Operating as Texas Entities

National carriers often underwrite policies under a separate Texas entity. State Farm, Allstate, Farmers, Travelers and others are all listed with Texas Lloyd’s Company in their name, although these carriers are all headquartered out of the state.

Blue Cross Blue Shield is headquartered in Chicago, but operates as Blue Cross Blue Shield of Texas, a separate entity with Texas based employees and policies.

When a national carrier underwrites under a Texas entity, there’s little difference from a carrier headquartered in Texas. State Farm Lloyds, which is the nation’s largest insurance carrier by volume has 8,000 employees in Dallas. This regional office employs more than most Texas insurance carriers.

Does it Make Sense to Buy Insurance Local?

Are Texas insurance companies a better option, with lower prices and better coverage? Most of the Texas carriers are small, and size plays more of a role than where the company is headquartered.

There are pros and cons. We would all prefer to work with customer service in Texas, rather than in India, the Philippines or California. Even if a carrier is headquartered elsewhere, your insurance agent is likely to live in your city. It’s prudent to read online reviews to assess the service and competence of a local branch.

If you go with Texas insurer, you won’t have to explain recent weather conditions. Texas has received nine years’ worth of hail by the end of April. If you go to Waco-based Texas Fair Plan’s website, it immediately asks if you’re a policy holder impacted by the recent hail and windstorms. Then you get the friendly message: “We are here to help! Affected by recent storms? Call our 24-hour claims center.” Feeling understood by a fellow Texan, is a pro to buying local.

Buy from a Local, Independent Agent

Overwhelmed by insurance choices? Don’t worry. Call an independent agent which is more likely to work with Texas based carriers. Hettler works with both national and Texas insurance companies for auto, home and commercial.