Homeowners Insurance

Buying a home is an investment in your future. From the smallest one bedroom to the largest ranch, owning a home is an accomplishment and a terrific way to secure your future. One of the most important things you can do to protect your investment is to purchase Texas homeowner’s insurance. Homeowner’s insurance pays to repair or replace your home or personal property if it is damaged or destroyed by something covered under your policy. Read some information about homeowner’s insurance and make an informed decision when and if you are decide to purchase.

Available Coverage

Generally, when you purchase insurance to cover your home, there are five different types of coverage you can include in your policy. Dwelling coverage pays for damage to your house and “unattached structures” like fences, sheds even garages. Personal Property secures personal items like clothes, furniture and appliances against theft. Liability protects you if you are sued over damage caused to another’s property. Medical Payments coverage assumes the cost of treating someone injured on your property. And Loss of Use pays for additional expenses if you cannot remain in your home because of damage and need to find another place temporarily.

Types of Policies

In Texas, it is possible to purchase one of two types of polices- Comprehensive Coverage or Specified Perils Coverage. Comprehensive Coverage, also called “all risk” coverage offers the broadest protection possible. Generally, everything is covered unless your policy specifically excludes it. Specified Perils Coverage offers more narrow coverage with only the specific “named” perils in the policy covered.

It is important to note that even with an all risk policy, there are usually several exclusions. Make certain to read your policy carefully for exclusions to ensure the perils you want protected are covered. For instance, typical homeowner’s policies do not cover damage caused by floods, earthquakes, termites, wind or hail damage, normal wear and tear, mold and most water damage.

Important Terms

Insurance policies are filled with unfamiliar terms, often making it difficult to understand exactly what is covered and how. Understand the following terms and make it much easier to read through your policy.

Replacement Cost refers to the actual dollar amount of replacing or repairing your home. This figure is based on current construction costs, is different from market value and does not include your land.

Actual Cash Value is simply the cost to replace your property less depreciation. Actual cash value offers less coverage because depreciation is taken into consideration.

Policy Dollar Limits are the maximum amount your insurance company must pay if your home is damaged or destroyed. It is critical you have enough coverage to avoid financial distress. As it relates to personal property coverage, most insurance policies only cover up to a certain amount for valuables and you will have to seek additional coverage.

In Texas, Homeowner’s insurance protects your home and property against damage as a result of theft or named perils. Most policies include exclusions and it’s a good idea to review the terms of any policy beforehand to ensure you have the protection you need.