Who in Texas needs to have home insurance?

It’s generally recommended that most homeowners in Texas have home insurance. Few could afford to rebuild their house if it were destroyed, and insurance has other important protections too.

For the many homeowners who have an outstanding mortgage balance, insurance is likely compulsory. Lenders typically require certain coverages so that the house serving as collateral is insured against damage. 

Homeowners shouldn’t base coverage selections on only lender requirements, though. They should select coverage primarily based on their own needs — and that means almost everyone who owns a house should have home insurance.

What insurance coverages are available through homeowners policies?

Homeowners policies normally offer coverages that protect the house, belongings in (and maybe not in) the house, and the homeowners’ family. Some important coverages are:

• Structural Coverage: Typically covers damage to the main house that’s being insured, usually offering protection against perils like storms, fallen trees, fires, burglaries, etc.
• Auxiliary Structures Coverage: Typically covers damage to separate structures on the property, possibly offering protection for detached garages, storage sheds, gazebos, guesthouses, boathouses, etc.
• Personal Property Coverage: Typically covers the homeowner’s belongings, possibly protecting items like appliances, curtains, furnishings, jewelry, cookware, cameras, books, computers, etc.
• Loss of Use Coverage: Typically covers certain perils that render the insured home uninhabitable for an extended period, often assisting with costs for alternate accommodations, meals and other unexpected immediate expenses.
• Personal Liability Coverage: Typically covers certain lawsuits that could be filed against the homeowner or their immediate family. May cover defamation, dog bites and other lawsuits as defined in a policy’s terms.

How much does home insurance insure belongings for?

When checking the personal property coverage within a homeowners policy, there are a couple of key factors that determine how much belongings are covered for:

• Limits: Virtually every policy has at least one limit as to how much coverage is provided. Most policies have two limits: one for everything, and one for high-value items.
  For example, a policy might cover personal belongings up to $100,000. Coverage for collectibles, artwork, electronics, and other high-value items might only be $2,500 per category, though.
• Reimbursement: Should belongings be lost or damaged in a covered incident, they might be reimbursed according to actual cash value or replacement cost.
  Actual cash value generally pays what the belongings were worth at the time of the incident, taking into account depreciation. Replacement cost coverage generally reimburses what it’ll cost to replace lost belongings with similar items. Replacement cost tends to give much more protection.

An insurance agent specializing in home insurance can help check the personal property limits and what reimbursement method a homeowners policy has.

What are the policy abbreviations for homeowners policies?

Many insurance policies, including homeowners policies, have fairly standard abbreviations within the insurance industry. Policies with the same abbreviation usually provide similar coverages. Some frequently used abbreviations homeowners policies might have are:

• HO-1: Generally a basic policy that covers the house and belongings against 10 specific perils, usually insuring the dwelling at actual cash value. Personal property and liability may not be covered. 
• HO-2: Generally a broader policy that covers the house and belongings against 16 perils, usually upgrading dwelling coverage to replacement cost. Personal property and liability may not be covered. 
• HO-3: Often the most commonly chosen policy type. Generally covers the dwelling against all risks that aren’t explicitly excluded, and offers replacement cost coverage for the dwelling. Personal property and liability coverage are normally included, too.
• HO-5: One of the most extensive homeowner policies. Generally covers the dwelling, belongings and liability risks with extensive protection, and may add other ancillary coverages too.

For help insuring a home in Texas, contact the independent insurance agents at Johnson Insurance. We’ll help you find homeowners insurance that’ll protect your house well.