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Texas Homeowners Policies

Types of Policies

What Homeowners Policies Do And Don't Cover

Policy Dollar Limits

Replacement Cost Coverage Of Your House

Coverage For Your Personal Propery

Take Inventory Of Your Property

Other Residental Policies

Other Types Of Insurance You Might Need

Homeowners Insurance

(En Español)

Homeowners insurance protects you from financial losses caused by storms, fire, theft, and other events stated in your policy. It is important to know what’s in your policy. Make sure you read your policy carefully and understand your coverages.

It’s also important to know your rights. Texas has a Consumer Bill of Rights for homeowners and renters insurance. Your company must send you the Bill of Rights with your policy or renewal. Don’t wait until you have a claim to review your policy and to know your rights.

Texas Homeowners Policies

You can buy a dwelling policy that covers only the structure of your house, but most homeowners buy a policy that combines five different coverages in a single policy:

Types of Policies

Insurance companies may sell several types of policies in Texas, each with a different level of coverage. Three of the policy forms sold in Texas – the HO-A, HO-B, and HO-C – are standardized. This means the policy language and coverages provided by these policies are the same, regardless of the company writing the policy. Although an HO-B policy written by one company will be exactly the same as an HO-B policy written by another company, the two companies may charge different rates.

Companies may offer alternative policy forms, if approved in advance by the state’s Commissioner of Insurance. These policies are not standardized and usually provide varying coverages. Read your policy carefully to know exactly what coverages are included.

Some companies may sell more than one policy form but may offer only one form to customers. If a company offers you a policy with less coverage than you’d like, ask if other policy forms are available. You may also be able to buy additional coverage by adding endorsements to your base policy.

Following is a brief description of the types of policies sold in Texas:

To compare coverages fro policies approved for sale in Texas, visit the Office of Public Insurance Counsel (OPIC) website.

What Homeowners Policies Do and Don’t Cover

Most Policies Cover Losses Caused by

Most Policies Do Not Cover Losses Caused by

Fire and lightning Flooding
Aircraft and vehicles Earthquakes
Vandalism and malicious mischief Termites
Theft Insects, rats, or mice
Explosion Freezing pipes while your house is unoccupied (unless you turned off the water or heated the building)
Riot and civil commotion Wind or hail damage to trees and shrubs
Smoke Losses if your house is vacant for 60 days or more
Windstorm, hurricane, and hail (unless you live on the Gulf Coast) Wear and tear or maintenance
Sudden and accidental water damage Water damage resulting from continuous and repeated seepage

Wind and hail coverage. Companies may exclude coverage for certain losses. For example, if you live on the Gulf Coast, you might receive an endorsement that excludes coverage for wind and hail damage. In areas with a history of hail storms, some companies provide only actual cash value coverage instead of full replacement cost for roofs. Actual cash value pays for damage minus depreciation on the roof, depending on its age and condition.

Mold coverage. Most policies will not cover mold remediation beyond the amount necessary to repair or replace property damage caused by a water loss otherwise covered by the policy. The HO-A policy doesn’t cover mold remediation or damage caused by water leaks, but some companies offer an endorsement that covers sudden and accidental water leaks. Some, but not all, of the other approved policies also cover sudden and accidental water leaks. Read your policy or ask your agent whether your policy covers water leaks and mold remediation.

Insurance companies are required to offer you mold remediation coverage. Depending on the company, this coverage will be offered in dollar or percentage increments up to 100 percent of your policy’s limits. If you have questions or concerns about how a mold claim is being handled, or if you need information about how to minimize mold losses, ask your insurance company for a set of guidelines regarding mold claims.

Policy Dollar Limits

If you insure your house for $100,000, that’s the most you will get if it’s destroyed, even if it would cost more to replace it. The Declarations Page at the front of your policy shows your policy’s dollar limits. Talk with your agent or company representative if you have any questions about your insurance limits. If a fire destroys your home, Texas law requires the insurance company to pay the full amount of the policy, even if this amount is more than the replacement cost.

Don't wait until you have a claim to learn your policy’s dollar limits.

Replacement Cost Coverage of Your House

The HO-B and HO-C 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 and does not include the value of your land. If you are not sure of the amount it would cost to rebuild your home, your company or agent usually has construction cost tables to help you determine the cost.

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 insurance company will only pay a portion of a partial loss.

Unless you buy an endorsement increasing your coverage, HO-A policies only provide actual cash value coverage. Actual cash value is the replacement cost of your property minus depreciation. If your home is destroyed and you only have actual cash value coverage, you may not be able to completely rebuild.

If you have an HO-A amended policy or an approved alternative policy, read your policy carefully to know whether it offers replacement cost coverage or actual cash value coverage.

Maintain Adequate Coverage

Buy enough coverage to avoid a major financial loss if your home is severely damaged or destroyed. This means keeping a realistic dollar amount of coverage on your house.

Coverage for Your Personal Property

HO-B policies automatically cover household contents – furniture, clothes, appliances, etc. – up to 40 percent of the amount of your dwelling coverage. This means if your house is insured for $100,000, its contents are insured for up to $40,000. You can get more coverage by paying a higher premium.

Personal property coverage pays only the actual cash value of damaged, stolen, or destroyed household goods unless you buy replacement cost coverage. Actual cash value is an item’s replacement cost, minus depreciation.

Replacement cost coverage offers you more protection than actual cash value coverage. For example, if a burglar steals your six-year-old television set, and you only have 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.

Companies generally want you to prove that you replaced an item before they’ll pay your claim in full. However, if you have an HO-B policy, the company must advance you the first $1,500, plus the depreciated value of any other damaged property, without requiring proof of replacement. After that, the company must pay you within five business days after receiving proof you replaced, restored, or repaired the property. A company can offer to replace the items instead of paying cash, but the choice is yours.

Take Inventory of Your Property

Many people learn after a fire or storm that they didn’t have enough personal property coverage. Making an inventory will help you decide how much insurance you need. It will also simplify claims.

Your inventory should list each item, its purchase date, value, and serial number. Photograph or videotape each room, including closets, open drawers, storage buildings, and garage. Keep the inventory and receipts for major items in a fireproof place or another location.

Homeowners insurance on certain personal items like jewelry and furs is limited. You may be able to buy more coverage for an extra premium.

Other Residential Policies

Other Types of Insurance You Might Need

Flood Insurance
Texas ranks near the top of the nation in weather-related property damage each year. A large portion of this damage is caused by flooding.
Homeowners policies do not cover flood damage. To protect yourself from losses caused by most flooding, you can purchase a separate flood insurance policy from the National Flood Insurance Program (NFIP) administered by the Federal Emergency Management Agency. Local insurance agents sell NFIP flood policies and can tell you about the program in your area. For more information, call NFIP


If a lender determines that a property is at a high risk of flooding (called being in a “special flood hazard area”), it will require you to purchase flood insurance. A special flood hazard area has a 1 percent chance of being flooded in any given year.

Hurricanes and Windstorm Insurance
The Texas Windstorm Insurance Association (TWIA) is the state’s insurer of last resort for wind and hail coverage in the 14 coastal counties and parts of Harris County on Galveston Bay. TWIA provides wind and hail coverage when insurance companies exclude it from homeowners and other property policies sold to coastal residents. You can buy TWIA coverage through local insurance agents if you need it.

When a hurricane enters the Gulf of Mexico (80 degrees longitude and 20 degrees latitude), you can no longer change or purchase new windstorm coverage.

Your agent can tell you how to get an inspection. For more information about windstorm coverage, contact TWIA


Earthquake Insurance
If you are concerned about earthquakes, you can get coverage with a separate policy. The cost is relatively low because earthquakes are rare in Texas.

Extra Coverage (Endorsements)
You might want more coverage than your policy provides for certain items. For an extra premium, you may be able to buy endorsements that expand or increase the coverage on these items. Some of the most common endorsements expand or increase coverage for jewelry, fine arts, camera equipment, coin or stamp collections, computer equipment, and radio and television satellite dishes and antennas.

Personal Umbrella Liability Insurance
If you have assets to protect and want more liability coverage than a homeowners policy provides, you can buy a separate umbrella policy. Because policies vary, make sure the agent or company fully explains the coverage.