DETAIL COVERAGE EXPLANATION
Insurance companies may sell several types of homeowners policies in Texas, each with a different level of coverage. Three of the policy forms available -HO-A, HO-B, and HO-C - are standardized. This means the policy language and coverages are the same, regardless of the company writing the policy. Keep in mind, however, that although an HO-B policy written by one company will provide exactly the same coverages as an HO-B policy written by another, the two companies may charge widely different rates.

Companies may also offer alternative policy forms. These policies are not standardized and usually provide varying coverages. Read your policy carefully to know exactly what coverages are included. If a company offers you a policy with less coverage than you´d like, ask if other policy forms are available. You also may be able to add additional coverage by buying endorsements to the base policy.
Following is a brief description of the types of homeowners policies sold in Texas:

• HO-A policies provide extremely limited actual cash value coverage of your home and its contents. Only the types of damage specifically listed in the policy are covered. The HO-A is a standardized Texas policy.
• HO-A amended policies provide more extensive coverage than the base HO-A policy but less coverage than an HO-B. Coverage provided by these policies may differ by company.
• HO-B policies provide replacement cost coverage for most types of damage, except those specifically excluded in the policy. The HO-B is a standardized Texas policy.
• HO-C policies provide the most extensive coverage, but they are more expensive than other types of policies. The HO-C is a standardized Texas policy.
• Approved alternative policies offer varying levels of coverage. Companies may only sell alternative policies approved in advance by the Commissioner of Insurance. Coverage may differ considerably from one company to another and from the coverage provided in the standardized Texas homeowners policies.

Generally, HO-B policies provide the most coverage for the price, but some companies do not offer them. For a comparison of the policy forms approved for sale in Texas, visit the Office of Public Insurance Counsel´s website.

RETURN TO TOP »

SHOPPING FOR HOMEOWNERS INSURANCE
When shopping for a homeowners policy, remember that your premium will be based on several factors, including your county of residence, the level of fire protection available, the construction type of your home (brick or frame), the type of policy you purchase, and the amount of coverage you buy.

RETURN TO TOP »

MAKE SURE YOUR COVERAGE FITS YOUR NEEDS
Buy enough coverage to avoid a major financial loss if your home is badly damaged or destroyed. This means keeping a realistic dollar amount of coverage on your house.

RETURN TO TOP »

REPLACEMENT COST COVERAGE
Insure your home´s replacement cost, not its market value. The market value may be higher or lower than the cost to rebuild your home. With replacement cost coverage, you can rebuild your home on the same lot at current local construction costs if it is destroyed.

HO-A does not provide replacement cost coverage, but you may be able to add it with an endorsement for additional premium.
Companies use various methods to determine the estimated replacement cost of your home. Be prepared to answer questions about your home´s square footage, number of bedrooms, and number of bathrooms. Inform the agent of any custom features that are part of the dwelling.

When calculating your home´s replacement cost, deduct the value of the land, foundations that are below the surface of the ground, and other items such as landscaping and lawn sprinkler systems.

Construction costs change, so it´s wise to update your coverage amounts annually.

RETURN TO TOP »

WHAT ABOUT MY FURNITURE?
Household contents are automatically covered only for their actual cash value. Actual cash value is the replacement cost minus depreciation.

You can buy replacement cost coverage for your possessions as an endorsement. Homeowners policies offer very limited coverage for valuables like jewelry, furs, cash, and stamp and coin collections. You can buy separate endorsements to increase your coverage.

RETURN TO TOP »

LOWERING YOUR PREMIUM BY INCREASING YOUR DEDUCTIBLE
Texas homeowners policies generally carry a basic deductible of 1 percent of the insured value of the dwelling. Deductibles are available as high as 5 percent and as low as $100, although not all companies offer deductibles that low.
Keep in mind that if you raise your deductible, you´you'll have to pay more out of pocket for repairs and replacement before your policy pays.

RETURN TO TOP »

WHAT DOES A HOMEOWNDER'S POLICY COVER?

• Most Policies Cover -
• Fire and lightning
• Damage by aircraft & vehicles
• Vandalism & malicious mischief
• Theft
• Explosion
• Riot & civil commotion
• Smoke damage
• Falling objects
• Windstorm, hurricane and hail
• Collapse of building
• Freezing
• Accidental discharge, leakage or overflow of water or steam

ADDITIONAL INFORMATION ON POLICY COVERAGE: OTHER STRUCTURES
When a house is covered on a Homeowners Policy, there is automatic coverage that extends to cover fences, drives, walks, yard fixtures, and detached outbuildings. The limit of coverage is 10% of the amount of coverage on the main house and is restricted to the insured premises. Coverage does not apply to outbuildings * rented to others, used commercially, or for farming purposes. An additional amount of insurance can be purchased for detached buildings if the value is greater than the 10% extension.

PERSONAL PROPERTY EXTENSION
Personal property is covered anywhere in the world. Coverage is the greater of $1,000 or 10% of the amount of coverage on personal property when it is away from the described premises. This extension does not apply to theft of personal property at any other residence you own or rent for more than a temporary period.
Loss of Use Coverage On all Homeowners Policies, coverage is included that will pay for the extra cost of having to reside in temporary quarters while your residence is being repaired. There is a requirement that the damage to the residence must have been caused by an insured peril.

TREES, SHRUBS, PLANTS & LAWNS
Up to $250 coverage can apply to each tree, shrub, plant or lawn for certain specified perils. The maximum limit of coverage is 5% of the amount of coverage on the house.

Most Policies Do Not Cover -

• Flooding
• Earthquakes
• Termite damage
• Damage by insects, rats and mice
• Freezing pipes while your house is unoccupied (unless you turned off the water or heated the building)
• Losses if your house is vacant for 60 days or more
• Wind or hail damage to trees and shrubs

RETURN TO TOP »

HOW MUCH COVERAGE SHOULD I HAVE?
You should have enough coverage to avoid a major financial loss if you have a fire or other kind of damage. This means keeping a realistic dollar amount of coverage on your house. It also means making sure your policy provides replacement cost coverage.

Most homeowners policies provide replacement cost coverage for your house, up to your policy's dollar limits. 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. It does not include the value of your land. To receive full payment (minus your deductible) for a partial loss, such as a hail-damaged roof, you must insure your house for at least 80 percent of its replacement cost. If you insure your house for less than 80 percent of the full replacement cost, the policy will pay only part of the expense of a partial loss.

Texas law requires payment of the full amount of the policy if fire destroys your home -- even if this amount is more than the replacement cost

Your policy's dollar limits are important if you ever file a claim. If you insure your house for $80,000, for example, that is the most you will get if it is destroyed. The Declarations page on the front of your policy shows how much coverage you have.

RETURN TO TOP »

WHAT DEDUCTIBLE DO I NEED ON MY HOMEOWNERS POLICY?
Deductibles help reduce your cost, but they also limit the amount you may recover in event of loss. The standard deductibles is 1% of the amount of coverage on the house. If the house is covered for $75,000, then the standard deductible would be $750. The deductible applies to all losses to the house or to personal property. Other deductible options are: $250, $500, $1,000, and 1/2 of 1%, and various other percentages. When you lower the deductible, you are buying back more coverage, so the premium will be higher.

RETURN TO TOP »

WHAT ABOUT REPLACEMENT COST FOR MY PERSONAL PROPERTY?
Homeowners policies automatically cover household contents -- furniture, clothes, appliances, etc. -- up to 40 percent of the amount your house is insured for. This means if you insure your house for $100,000, its contents are insured for $40,000. You can get more coverage by paying a slightly higher premium. This automatic coverage pays only the actual cash value of damaged, stolen or destroyed household goods. Actual cash value is an item's replacement cost, minus depreciation.

Replacement cost coverage gives you more protection than actual cash value coverage. The following example tells why: A burglar steals your six-year-old television set. With actual cash value coverage, you get only what you would expect to pay for a six-year-old television set. With replacement cost coverage, the insurance company pays to replace your TV with a new set similar to the stolen one.

RETURN TO TOP »

WHAT TYPES OF EXTRA PROPERTY COVERAGE MIGHT I NEED?
You might want more coverage for certain items than your policy provides. For an extra premium, you can buy endorsements -- policy add-ons -- covering these items or increasing the coverage you have.

Some of the most common endorsements increase coverage for residential glass, jewelry, fine arts, camera equipment, coin or stamp collections, computer equipment and radio and television satellite dishes and antennas:

Residence Glass Coverage * This endorsement provides blanket residence glass breakage coverage limited to $100 per pane with no deductible. Scheduled glass coverage is also available for any items above this amount.

Increased Limit on Jewelry, Watches and Furs * The policy has a $500 theft limitation on jewelry, watches, and furs. The limit may be increased not exceeding $5,000.

Increased Limits on Business Personal Property * There is a policy limitation of $2,500 (any one loss) on losses of property pertaining to a ranch, farm, business, trade, occupation or profession. This endorsement can be attached to increase this amount to a total of $5,000.

Increased Limit on Money/Bank Cards * The homeowners policy covers money and bank cards up to $100. This endorsement can increase that amount up to $500.

Television Antenna/Satellite Dish * Specific Coverage with no deductible may be added by this endorsement for radio and television towers, masts, antennas, and outside satellite dishes.

Personal Computer Coverage * Specific Coverage for electronic data processing equipment or electronic media that you own or lease may be added subject to a $100 deductible.

RETURN TO TOP »

PERSONAL LIABILITY (Other Than Automobile)
The Personal Liability Coverage provides protection when you become legally obligated to pay damages for bodily injury or damage to someone's property because of your negligence. It will also pay to defend any suit against you even if the allegations are false.

• Your dog may bite a neighbor or passer-by.
• You may accidentally injure someone else while hunting or playing golf.
• Someone could be injured in your swimming pool or slip and fall on your property.

Personal Liability Coverage not only protects you for things happening on your premises but also for your personal activities worldwide. This liability coverage does not cover your business activities. The minimum required limit of Personal Liability Coverage is $25,000 but can be increased for a small additional premium.

Personal Medical Payments This coverage provides for medical bills that result from an accident which occurs on your premises or as a result of your personal activities. Medical Payments Coverage applies regardless of whether you or your family is at fault.

EXAMPLE: If a neighbor's child fell from a tree at your home and broke her arm, the Medical Payments Coverage will pay the resulting medical expenses.
This coverage does not pay for medical bills incurred by you or members of your household. Minimum Medical Payments Coverage of $500 is required on all homeowners policies but may be increased to $5,000 for a small additional premium.

RETURN TO TOP »

WHAT KIND OF OPTIONAL LIABILITY COVERAGE IS AVAILABLE?
In addition to the liability insurance included in your homeowners policy, you may want to consider some of the following optional endorsements. All these additional liability coverages would require an additional premium.

PERSONAL INJURY COVERAGE
This endorsement adds coverage for false arrest, libel, slander, defamation of character, invasion of privacy, wrongful eviction, or wrongful entry.

OFFICE, PRIVATE SCHOOL OR STUDIO OCCUPANCIES
Since business liability is excluded under the Homeowners Policy, this endorsement is REQUIRED if you have an office, professional, private school, or studio occupancy at your principal residence. This endorsement is also available, optionally if you have this exposure at an additional residence. Coverage is not available under a Homeowners Policy when the business occupancy is not in a residence.

FARMERS PERSONAL LIABILITY COVERAGE
If you operate a farm or rent it to others at a separate location from your home, you can obtain liability coverage for the farm premises by adding this endorsement.

WATERCRAFT LIABILITY COVERAGE
There is limited liability coverage for the use of watercraft under the Homeowners Policy. Liability coverage does not apply to watercraft with outboard motors over 25 HP, inboard-outboard or inboard motors over 50 HP or sailboats 26 feet or longer. Liability and medical payments coverages can be extended by adding this endorsement.

BUSINESS PURSUITS LIABILITY COVERAGE
Personal liability and medical payments coverages can be extended to include limited classes of business pursuits. Coverage is not available if you are the sole owner or partner in your business.

ADDITIONAL PREMISES LIABILITY COVERAGE
With this endorsement you can add liability and medical payments coverages for one- or two-family residential property which you rent to others.

RETURN TO TOP »

WHAT DISCOUNTS CAN I GET ON MY HOMEOWNERS INSURANCE?
Companion Auto - If the same insurance company writes your homeowners and automobile coverage, you are eligible for a 5% premium discount on your homeowners policy.

Home Security - You can get a 5 percent premium discount if your house meets certain minimum security standards for doors and windows.

Burglar Alarms - You can get a 15 percent premium discount if you have an electronic burglar alarm system that meets certain minimum requirements.

Sprinkler Systems - Effective March 1, 1997, you can save 8 percent on your homeowners premium if your home has an approved fire protection sprinkler system.

RETURN TO TOP »