Home insurance provides financial protection for your home and personal property in the event of a covered loss, such as a fire or theft. It typically covers the structure of your home, your personal belongings, and any additional living expenses you may incur if your home is uninhabitable due to a covered loss.
Texas Home Basics and Coverages
Dwelling Coverage (Coverage A)
The dwelling coverage is based on the replacement cost of the property. It is largely based on square footage and the build quality of the home. Other details that may increase or decrease the dwelling amount are number of bathrooms, style of roof, size of garage, single or multi story, fireplaces, patios, French doors, wet bars, and built-in cabinetry. Anything attached to the home can be included in the replacement cost. Replacement cost for most properties is currently falling between $160-$210 a square foot. This can be higher for high value homes. Depending on where a property is located, the dwelling replacement cost could fall above or below the market value of the home. A property in a low valued area will cost the same to replace in a high value area even though the market values have a significant difference. The land is not included in the replacement cost.
Other Structures (Coverage B)
Includes any structure not attached to the home. This can include fences, sheds, gazebos, pools, hot tubs, car ports, work shops, and detached garages. It is a built-in coverage at 10% of the dwelling coverage A. Depending on the company, Coverage B can be increases. Speak with your Texas Edge Agent for more information.
Personal Property (Coverage C)
Personal property is just that. All your property that is not attached to the house. Imagine if you tore off the roof of your home and turned your house upside down. Everything that falls out would fall under this coverage. There is usually coverage built in for property away from the premises. This can include personal items that the insured has in a car, shed, or with them while traveling. Some things to keep in mind regarding personal property:
A property loss will only be covered if the loss is from a covered peril on the policy.
Most companies insure at Actual Cash Value (ACV) on personal property with an additional endorsement that can add replacement cost coverage.
Most companies have a built in Personal Property coverage of 50% of the dwelling coverage amount. For example, if a home is covered for $300,000, it will include a limit of $150,000 for personal property. This coverage can be increased with some companies. Ask your Texas Edge Agent for more information.
Loss of use
If you are unable to use your home due to a covered loss, this coverage is used to temporarily relocate you while repairs are being made. The limit for this coverage is usually 20-30% depending on the carrier and can usually be increased.
The wind and hail deductible
This deductible applies to a wind and/or hail loss. Many companies offer a percentage deductible. Most require at least a 1%, but there are companies that require a higher deductible (such as 2%) depending on what county the property is located in. Coastal properties may have wind and hail excluded and require a separate policy. If the wind and hail is included, it is likely a 3% or 5% deductible.
All other perils
This deductible applies to all other covered loss’ other than wind and hail. Companies offer a percent and a flat dollar amount. This is the out of pocket cost the insured will pay in the event of a claim.
Personal liability covers the policyholder's legal responsibility for accidents or injuries that occur on their property or as a result of their actions. This can include coverage for medical bills, legal fees, and other damages.
Medical payments are the first line of defense if someone gets injured on the insured’s property. Usually at a limit of $5,000. It is meant to keep a claim from escalating to a liability claim.