Part of Your Home Insurance Bill Is a Bet on Whether You'll Shop. Texas Just Moved to Ban It.

Update, September 30, 2026: TDI sent its answer to the governor on September 14, and the useful part for you is what it admits. On price optimization, the memo calls the September 2 bulletin a reminder “that it is illegal to use factors unrelated to insurance risk or a company’s expense to set home and auto insurance rates.” TDI treats it as already illegal, and its list of proposed law changes asks for nothing more on it. Here’s the catch the same memo spells out a page later: “companies may use new rates as soon as they file them with TDI, even though the department has not had a chance to review them.” So a rate built the old way can hit your renewal before anyone at TDI reads the filing. TDI asks the Legislature to consider a delay between filing and use, plus a 60-day notice of your renewal premium (we did the math on that one). Those are asks for the next session, not rules. On the rest: the roof item came out softer than the directive. Abbott directed TDI to “require insurers to include” a home’s FORTIFIED roof status in rate setting, and TDI’s September 16 bulletin B-0008-26 “encourages” mitigation discounts (what to ask your insurer). TDI plans a rule barring insurers from using the age of a home’s individual components to refuse coverage, and a claim-cost study, including claims closed without payment, by the end of 2026. The advice below doesn’t change: price your renewal before it lands.

Update, September 13, 2026: It is a rule now. The Texas Department of Insurance issued Commissioner’s Bulletin B-0007-26 on September 2, addressed to all insurance companies and their agents and representatives. TDI’s own definition is sharper than the governor’s: insurers “varying premiums based on factors unrelated to their policyholders’ risk of loss or the company’s expense so that the company can charge the highest price that policyholders will tolerate before shopping for a new policy,” including the use of elasticity of demand to predict whether you will renew or shop. The bulletin declares that “any practice that results in two policyholders with the same risk profile getting different premium increases is unfairly discriminatory under Texas law,” that any use of price optimization in pricing or in a rating plan “violates the Insurance Code,” and that “failure to fully comply is a violation of Texas law, and appropriate enforcement action will be taken.” Two things changed for you. It names no single line, so this covers your Texas car policy as well as your house. And there is no phase-in: it took effect the day it was issued. The recommendations TDI owes the governor’s office are still due September 14. The advice below stands everywhere else.

Some of what you pay for home insurance has nothing to do with your home.

It’s a guess about you. How likely you are to notice an increase, and how big a one you’ll absorb before you go get another quote. The industry has a name for pricing that way, and Texas just moved to outlaw it.

Governor Greg Abbott sent a letter on August 24 to Texas Insurance Commissioner Amanda Crawford directing the Texas Department of Insurance to issue a bulletin banning “price optimization” across every product the department regulates. His office defines the practice as insurers using “personal data unrelated to insured risk to set prices.”

Read that definition twice. Unrelated to risk. Not your roof, not your claims history, not what hail does to your county. Data about you as a customer.

The number behind the letter is the one Texas homeowners already feel. Abbott says the average annual homeowners premium in the state has risen 79% in six years, from under $2,000 in 2020 to over $3,500 in 2026.

Four more directives came with it. Insurers have to factor a home’s FORTIFIED roof status into rate calculations, which is the industry standard for wind and hail resistant construction. They can’t refuse to write or renew a residential policy based on the age of the house or its components. TDI has to stand up an insurance fraud task force, and study how inflated claims costs feed the state’s homeowner and auto markets. TDI sent its recommendations back to the governor’s office on September 14.

Price optimization is the loyalty penalty with a model behind it. The question it answers isn’t what your house costs to insure. It’s what you’ll put up with. The customer who renews without reading gets a different number than the customer who calls around, and neither one is ever told which they are.

That’s dumb, and it’s dumb in a specific way: the person who is worst at shopping subsidizes the person who is best at it, and nothing about their two houses is different.

Now the honest part. TDI wrote the bulletin on September 2, and it covers one state. Insurance trade groups have pushed back on the parallel effort in Illinois, arguing rate rules don’t touch what actually drives premiums: severe weather, repair costs, litigation.

They’re right about the causes. It doesn’t explain quoting two identical houses different prices based on which owner is paying attention.

Don’t wait for a regulator to sort this out, and if you’re outside Texas, don’t wait at all.

Pull three quotes before your next renewal. The entire practice depends on you not doing that. A model that prices your inertia stops earning the moment you stop being inert. Put a reminder on your calendar 30 days ahead of your renewal date so you’re comparing before the new premium lands, not after you’ve already paid it.

And when the renewal notice shows a jump, call your current insurer and ask what changed about your house. If the answer is nothing, you’ve found the part of the bill this directive is aimed at.

Our insurance estimator and the mortgages hub cover what moves a homeowners premium, which is a short list, and shorter than your renewal letter suggests.

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