Your Insurer's Ad Budget Is an Expense Line in Your Rate. Texas Just Asked the Legislature to Take It Out.

You know the ads. A talking animal, a disaster that follows somebody around, a jingle you cannot shake.

Somebody paid for those. Advertising is an expense, expenses go into the rate an insurer files with the state, and the rate is your bill.

On September 14 the Texas Department of Insurance sent Governor Greg Abbott a six-page memo answering his August directive to make property and casualty insurance cheaper. Most of it is the usual regulator vocabulary. One item is not.

Under “Limit advertising costs in rate factors,” TDI writes: “Statute allows insurers to include some advertising costs in expense components of rates. Disallowing any advertising expenses to be included in rate filings and passed along to consumers will improve the credibility of rates charged by insurers.”

That is the regulator, in writing, telling the Legislature the ad money reaches your premium and should not.

Here is the size of it. Progressive’s 2025 annual report puts total companywide advertising costs at $5.133 billion against $81.661 billion of net premiums earned. Divide: 6.3 cents of every premium dollar. Run the same two lines for 2023, $1.6 billion against $58.665 billion, and you get 2.7 cents. On a $2,000 policy that is the difference between about $55 a year and about $126.

Progressive is not hiding it. The same filing says the company “invested heavily in advertising during 2025 to capture consumer shopping.” Translation: your premium is buying the commercial aimed at your neighbor.

There is a fair argument on the other side, and it deserves one sentence. Ads are how a shopper learns another carrier exists, and shopping is the only thing that has ever pushed insurance prices down.

It still does not explain why the customer who renews without reading pays to go recruit the customer who does not.

The second item on TDI’s list is the one you can actually use. Texas homeowners and personal auto insurers, the department notes, already must give 60 days’ notice before they nonrenew a policy. TDI told the governor the Legislature “could consider requiring 60-day notice of the renewal premium, which would give consumers more time to shop for a better price.”

Read that twice. Your insurer owes you two months’ warning when it drops you, and nothing at all about the price.

None of this is law. These are recommendations for a legislative session that starts in January, and bills die for a living.

So give yourself the notice. Put a reminder on your calendar 60 days before your renewal date, call your carrier that week, and ask for the renewal premium in writing. If they will not quote it, that is your answer about which kind of customer they have you filed as. Then pull three quotes while you still have time to move.

Our insurance estimator and the auto insurance hub cover what actually moves a premium, and it is a shorter list than your renewal letter implies.

The rest of the memo is worth knowing about too. TDI wants a delay between the day a carrier files a new rate and the day it can charge it, because today Texas companies can use a rate before the department has reviewed it. It wants plain-language declarations pages instead of form numbers, a written list of every claim deadline, and a license or registry for roofing contractors. The one piece already in force is the September 2 bulletin declaring price optimization illegal, which we covered here.

How Candid Yak makes money. Some of the products we write about pay us if you apply or sign up through our links. That never changes our verdict, our rankings, or the numbers in this article. We call a bad deal a bad deal whether it pays us or not. Some brands shown in our comparison tools are placeholder examples while we finalize partner agreements, and we label them as such.