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:

• Dwelling pays for damage or destruction to your house and any unattached structures and buildings, such as fences, detached garages, and storage sheds.
• Personal property pays for theft, damage, or destruction of the contents of your house, including furniture, clothing, and appliances.
• Liability protects you against financial loss if you are sued and found legally responsible for someone else’s injury or property damage. A homeowners policy automatically provides $25,000 in coverage. You can buy up to $1 million in coverage for an extra premium.
• Medical payments pays medical bills for people hurt on your property. It also pays for some injuries that happen away from your home, such as your dog biting someone. A basic homeowners policy pays $500 in medical bills. You can pay extra and get up to $5,000 in medical payments coverage.
• Loss of use pays your additional living expenses (temporary housing, food, and other essential expenses) if your home is too damaged to live in during repairs. Most policies pay 10 to 20 percent of the amount of your dwelling coverage.

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:

• 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.
• HO-A amended policies provide more extensive coverage than the base HO-A policy but less coverage than an HO-B. For instance, HO-A amended policies may include replacement cost coverage and coverage of damage from sudden and accidental" water discharges. Neither of these coverages is included in the base HO-A policy. Coverage provided by HO-A amended policies vary by company.
• HO-B policies provide replacement cost coverage for most types of damage, except those specifically excluded in the policy. Generally, HO-B policies provide the most coverage for the price, but some companies do not offer the HO-B policy.
• HO-C policies provide the most extensive coverage, but they are more expensive than other types of policies.
• Approved alternative policies offer varying levels of coverage. Companies can sell alternative policies only if the policy form is approved in advance by the Commissioner of Insurance. Coverage may differ considerably from one company to another.

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

www.opic.state.tx.us

What Homeowners Policies Do and Don’t Cover