From Texas Department of Insurance, here are some basic information you want to know.
Texas Homeowners Policies
Most homeowners policies in Texas include the following coverages:
- Dwelling pays if your house is damaged or destroyed by a covered loss.
- Personal property pays if the items in your house (such as furniture, clothing, and appliances) are damaged, stolen, or destroyed.
- Other structures pays to repair or rebuild structures not attached to your house, such as detached garages, storage sheds, and fences.
- Loss of use pays your additional living expenses (housing, food, and other essential expenses) if you must temporarily move because of damage to your house from a covered loss. Your policy will pay either a percentage of the amount of your dwelling coverage (typically 10 to 20 percent) or for a specific period after the loss (such as 24 months).
- Personal liability pays to defend you in court against lawsuits and provides coverage if you are found legally responsible for someone else's injury or property damage.
- Medical payments pays the medical bills of people hurt on your property. It might also pay for some injuries that happen away from your home, such as your dog biting someone at the park. A basic homeowners policy pays $500 in medical bills, but you may buy up to $5,000 in medical payments coverage.
Types of Policies
Insurance companies in Texas may sell several types of policies. If a company offers you a policy with less coverage than you'd like, ask if other policies are available. You may also be able to buy additional coverage by adding endorsements to your policy.
The two types of policies sold in Texas are
- All-risk policies (also known as a comprehensive coverage or open perils coverage). These policies offer you broad protection and cover all causes of loss unless the policy specifically excludes them.
- Named perils policies (also known as specified perils coverage). These policies offer narrower protection than an all-risk policy and cover only the causes of loss specifically named in the policy.
Note about replacement cost and actual cash value:
- Replacement cost is what you would pay to rebuild or repair your home, based on current construction costs. Replacement cost is different from market value and doesn't include the value of your land. Ask your company if you aren't sure how much it would cost to rebuild your house.
- Actual cash value is what you would pay to rebuild or replace your property minus depreciation. Depreciation is a decrease in value due to wear and tear or age. If your home is destroyed and you only have actual cash value coverage, you may not be able to completely rebuild.
To compare policies approved for sale in Texas, visit the Office of Public Insurance Counsel (OPIC) website at www.opic.state.tx.us.
Companies may exclude coverage for certain losses. Even the most comprehensive all-risk policy will exclude certain types of damage.
The following chart shows the most common types of losses covered or excluded from a homeowners policy:
|Most Policies Cover Losses Caused by
||Most Policies Do Not Cover Losses Caused by
|Fire and lightning
|Sudden and accidental damage by smoke
||Termites, insects, rats, or mice
||Freezing pipes while your house is unoccupied (unless you turned off the water or heated the building)
|Vandalism and malicious mischief
||Losses if your house is vacant for the number of days specified by your policy
|Riot and civil commotion
||Wear and tear or maintenance
|Aircraft and vehicles
||Wind or hail damage to trees and shrubs
|Windstorm, hurricane, and hail (this coverage may be excluded if you live on the Gulf Coast)
||Mold, except what is necessary to repair or replace property damage caused by a covered water loss
|Sudden and accidental water damage
||Water damage resulting from continuous and repeated seepage