Texas Home Insurance Basics
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Here Are The Three Basic Pieces Of A Texas Home Insurance Policy
Property Coverage is broken down into a few components. At it's core though, it's the protection of physical property that you own against financial loss. That loss can come in many different forms, but the goal of insurance is to make sure that the property is put back together. So what are those components? Let's look at the three categories of property coverage on your Texas homeowners policy.
1. Dwelling Coverage is the first thing calculated on your policy. It is the amount of money that will be available to rebuild your home in the event of a total loss. The factors in play here will be the quality level of your home, the location, the age, they type of home, construction materials, and square footage. Texans are constantly attempting to manage the balancing act of having enough coverage while also keeping the dwelling amount down. We have two thoughts.
Higher dwelling amounts mean higher premiums and deductibles. How can we balance that for Texas homeowners?
Our job as independent insurance agents is to make sure that your home is replaced in a total loss. Any other objective above this one creates a very sticky situation for both of us. That said, we also work with you to make sure that you are not over insured since it affects your pocketbook. This is very much a conversation with Texas homeowners.
2. Personal Property are your worldly possessions! The old adage is to take your house and flip it upside down. Everything that falls out is classified as personal property. That may seem simplistic, but is realistic. Most of us who have been in a home for any amount of time have accumulated more than we realize. How does this sound?
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So how does the insurance company determine a number for your coverage of personal property. It is a percentage of your dwelling value that we mentioned above. It can range from 30% up to 100% in some cases. Make sure that you account for those pesky electronics and ALWAYS select replacement cost value rather than actual cash value. Saving three dollars a month won't seem worth it when you have a claim.
3. Separate Structures is one of the most fought over numbers in all of Texas home insurance. Many Texans living in city settings don't see a point to it and those in the country are always wanting more to cover the barns, garages, and workshops. Most home insurance policies sold in Texas will not allow you to remove the coverage, but you can always increase. If you have a barn, detached garage, or workshop make sure that you have enough coverage to rebuild it if something happens!
Liability Coverage on a Texas home insurance is generally comprised of two items: Personal Liability and Medical Payments to Others.These two line items work to protect you from claims made by other people against you or your family. These claims can be simple things like golf cart claims on a golf course or absurd like a teenager trespassing in your backyard and suing you. People are crazy! Let's look at how these two items work.
1. Medical Payments to Others is in place to make sure that if a visitor to your property is hurt that they can easily have out of pocket costs covered. It's amazing how this small thing can easily avoid litigation and further complications.
2. Personal Liability is there to protect you from claims that are made beyond things covered by Medical Payments To Others. This particular coverage can become incredibly important even if the claim is made away from your house and property. Personal liability on your homeowners insurance can protect you if you run a shopping cart into another car in a parking lot, if you do damage to a public space like a golf course, or even if your rotted out tree falls on the neighbors house. You see, it's not just for people tripping and falling into your pool.
Texas Home Insurance policies serve a primary purpose to protect your home and possessions. In that end, the policies have become complex and now cover many things beyond just the basic fire, wind, and hail. Your property and liability can be attacked from many angles, so these other coverage items are here to extend that protection where it matters! Let's look at a few key ones!
- Water Coverage is here to protect both your dwelling and your personal property. It covers the "sudden and accidental' discharge of water as it spews into your home. Most people are familiar with that type of home insurance protection. But what they don't consider is that slab leaks in home can be covered as an option. Along with that, Insurance For Texans will always include Sewer and Drain coverage to your policy. It's nasty water that has to be added to be covered. Texans usually agree with us on that one.
- Building Ordinance is a phrase that many Texans just scratch their head at when we mention it. That's because it's there to protect your pocket book in the event of extra work being needed during a claim. The cities all have building codes that affect the construction of homes. Over time, they change even though your current home is not impacted by that. Until there is a claim and the city code inspector makes you complete certain tasks as part of the claim reconstruction effort. Building Ordinance is there to take care of that for you!
- Identity Fraud has become a major concern of Texas homeowners over the last 20 years. It has a major impact upon your life, your finances, and can impact your home. The home insurance companies have taken notice and have taken an active role in trying to combat the losses from these incidents for you. They can't prevent theft, but the coverage can certainly help you put your life back together if someone does steal your identity.
Now that we have identified the three basic things that your Texas home insurance policy will cover, we need to talk about your responsibility in this contract. Yeah, no one likes this part. But we have to. There are two things that are the responsibility of the homeowner. One is regular maintenance and the other is the deductible.
Owning a home comes with repairs and maintenance over time. This is just one of the joys of home ownership. Your insurance contract will protect you if that water heater explodes and floods your house by cleaning up the mess. But the replacement of the water heater itself will be your financial responsibility in that event. The first time that a homeowner hears that, they are shocked. But it is standard operating procedure in the industry. Regular preventive maintenance will also help keep your claim activity down which will also save you a ton of money in the long run!
DeductiblesA deductible is the amount of money that you pay as your portion of any claim. In the last decade, the minimum amount of money required of you by the home insurance company has risen greatly. Especially for wind and hail. This has been done to attempt to limit the claim activity and keep premiums lower. It doesn't seem to be working. Did you know that there are three types of deductibles on home insurance in Texas?
- Hurricane deductibles are for those breathtaking moments along our Gulf Coast when the massive storms roll in. People who live in Houston, Galveston, Corpus Christi, or Port Aransas all have a story about their favorite hurricane. This deductible gets applied to damage that comes from those storms and is typically a percentage of your dwelling value. If you live in Burleson, this deductible will not have an effect on your policy even though it is listed. If you live in the Coastal plain or close to it, this deductible will have a minimum value of at least 2% of your dwelling value and some companies will be higher.
Wind & Hail deductibles apply to evens that create damage on your home from a storm. It is often referred to as your "roof" deductible as a hail claim on your roof is the number one type of home insurance claim in Texas. This deductible in Texas is always going to be a percentage of your dwelling value. This is why we strike that balance between enough insurance but also keeping the costs down. In many cases, the minimum deductible is going to be 1% of that dwelling value though it can be higher. Especially in high risk areas or non-bundled policies.
All Other Perils deductibles apply to everything else you can claim against your Texas homeowners insurance policy that is not listed in 1 & 2 above. This deductible can be either a flat dollar amount or a percentage of the dwelling value. The minimum amount required can be very low compared to the other two deductibles. However, the lower deductible will raise your premium.
At Insurance For Texans, we attempt to keep the topics simple so that you can better understand what you're getting for that premium. Working with hardworking Texas families in this manner allows us to understand what matters for you and how we can best help meet those needs and desires. We do focus on the tangible value that a Texas Home Insurance provides, but we also understand that discounts are important!
If you would like to work with real, local Texans that are focused on providing you options for coverage we fit that bill. As local independent insurance agents we shop the marketplace for you so that you can have the best coverage at the best price. That way we can all sleep at night. To get started working with our highly trained, professional agents, just click that blue button below and we will get started!