Homeowners Policy Types

HOMEOWNERS INSURANCE IN TEXAS

How do I know what homeowners policy to choose?

You may not be aware of it, but the state of Texas allowed a big change in homeowners insurance a few years ago. Among other things, that big change allowed insurance carriers to choose from a multitude of different policy forms, and/or create their own policy forms. It allowed them to package insurance coverage to produce competitive price points, that frankly sometimes don’t provide you with the best insurance coverage.

We know insurance can be confusing to consumers, so as professionals, we have tried through these illustrations to simplify homeowners insurance terms and inform you about your needs. This is just one example of our customer service.

Just give us a call and we can review this same type of illustration for other insurance needs like: rental insurance, investment property insurance, auto insurance, boat insurance, motorcycle insurance, life insurance, health insurance, and business insurance.

General Non-Specific Illustrations

Homeowners Insurance
Policy Coverage Types

BASIC: HOMEOWNERS DWELLING HAZARD INSURANCE COVERAGE:
8 PERIL POLICY with REPLACEMENT COST (a peril is a Named Cause of Loss)

• Named Cause of Loss: (referred to as a Peril) Fire, Lightning, Sudden & Accidental Damage by Smoke, Windstorm, Hurricane & Hail, Explosion, Riot & Civil Commotion, Aircraft & Land Vehicle, and Vandalism, (some policies require an extension of coverage for the Named Cause of Loss; Vandalism and/or Malicious Mischief).
• Other Structures: (on the dwelling premises but set apart from the building by a clear space) is provided and may be increased. Standard coverage is usually 10% of the dwelling coverage.
• Loss of Use: (or Additional Living Expense as it is known), is provided due to a covered loss that displaces an owner from the dwelling. Standard coverage is usually 20% of the dwelling coverage. (Be advised: A total loss by fire is a liquidated demand claim).
• Unscheduled Personal Property: (or Contents coverage as it is known) is provided and may be increased. Standard coverage can be 40%, 50% or 60% of the dwelling coverage, and can be provided at replacement cost or actual cash value.
• Comprehensive Personal Liability: (or Third Party Loss as it is known) is provided and may be increased. Standard coverage can be from $25,000 to $1,000,000 with $1,000 to $5,000 in medical coverage.
• Other Extensions of Coverage: do apply & are included.
• General Exclusions of Coverage: Intentional Acts of the insured; settling, cracking, shrinkage, bulging or expansion; mold & water leaks that occur over long periods of time & earth movement; other exclusions do apply & are included.
• Additional Insurance: may be purchased & applied through a schedule, endorsement or rider.

BETTER: HOMEOWNERS DWELLING HAZARD INSURANCE COVERAGE:
14 PERIL POLICY with REPLACEMENT COST (a peril is a Named Cause of Loss)

(If Actual Cash Value is quoted instead of Replacement Cost, you will incur depreciation as well as a deductible)

• Named Cause of Loss: (referred to as a Peril) Fire, Lightning, Sudden & Accidental Damage by Smoke, Windstorm, Hurricane & Hail, Explosion, Riot & Civil Commotion, Aircraft & Land Vehicle, Vandalism & Malicious Mischief.
• Extended Named Cause of Loss: Theft or Attempted Theft, Total or Partial Collapse of the Building, Falling Objects, Sudden & Accidental discharge, leakage, or overflow of Water or Steam, (that may or may not include Sewer and Drain Back-Up), Freezing of Plumbing, Heating, Air Conditioning & Domestic Appliances, & Accidental Residential Glass Breakage. (Not all policy types extend to 14 perils as listed here).
• Other Structures: (on the dwelling premises but set apart from the building by a clear space) is provided and may be increased. Standard coverage is usually 10% of the dwelling coverage.
• Loss of Use: (or Additional Living Expense as it is known), is provided due to a covered loss that displaces an owner from the dwelling. Standard coverage is usually 20% of the dwelling coverage. (Be advised: A total loss by fire is a liquidated demand claim).
• Unscheduled Personal Property: (or Contents coverage as it is known) is provided and may be increased. Standard coverage can be 40%, 50% or 60% of the dwelling coverage, and can be provided at replacement cost or actual cash value.
• Comprehensive Personal Liability: (or Third Party Loss as it is known) is provided and may be increased. Standard coverage can be from $25,000 to $1,000,000 with $1,000 to $5,000 in medical coverage.
• Other Extensions of Coverage: do apply & are included.
• General Exclusions of Coverage: Intentional Acts of the insured; settling, cracking, shrinkage, bulging or expansion; mold & water leaks that occur over long periods of time & earth movement; other exclusions do apply & are included.
• Additional Insurance: may be purchased & applied through a schedule, endorsement or rider.

BEST: HOMEOWNERS DWELLING HAZARD INSURANCE COVERAGE:
An ALL RISK POLICY with REPLACEMENT COST

• All Risk of Physical Loss: Full coverage to the property, Property Coverage A (dwelling coverage), unless the cause of loss is excluded or otherwise limited as described in general here: Smog or Smoke from industrial operation (limited), cloth awnings (limited), greenhouse (limited), structures partially in, over or under water (limited), mechanical breakdown of mechanical devices, wear & tear or deterioration of property that causes itself to destroy itself, rust or rot, extremes of temperature, contamination, rats, mice, termites or other insects, loss to an insured’s property caused by animals or birds owned by an insured & earthquake, landslide or earth movement.
• Other Structures: (on the dwelling premises but set apart from the building by a clear space) is provided and may be increased. Standard coverage is usually 10% of the dwelling coverage.
• Loss of Use: (or Additional Living Expense as it is known), is provided due to a covered loss that displaces an owner from the dwelling. Standard coverage is usually 20% of the dwelling coverage. (Be advised: A total loss by fire is a liquidated demand claim).
• Unscheduled Personal Property: (or Contents coverage as it is known) is provided and may be increased. Standard coverage can be 40%, 50% or 60% of the dwelling coverage, and can be provided at replacement cost or actual cash value.
• Comprehensive Personal Liability: (or Third Party Loss as it is known) is provided and may be increased. Standard coverage can be from $25,000 to $1,000,000 with $1,000 to $5,000 in medical coverage.
• Other Extensions of Coverage: do apply & are included.
• General Exclusions of Coverage: Intentional Acts of the insured; settling, cracking, shrinkage, bulging or expansion; mold & water leaks that occur over long periods of time & other exclusions do apply & are included.
• Additional Insurance: may be purchased & applied through a schedule, endorsement or rider.

DISCLAIMER: THE ABOVE EXAMPLES ARE NOT CONTRACTS OR BINDERS OF COVERAGE,THEY ARE FOR ILLUSTRATION PURPOSES ONLY

• All examples above contain a percentage deductible, where a deductible clause applies.
• Premiums are for a 12 month policy period & are subject to change.
• Additional coverage for specific items may be Scheduled as additional insurance.
• Additional Discounts may include:
  • New Home Credit
  • Companion Auto Policy Credit
  • Claims Free Credit
  • Monitored Alarm Credit
  • Companion Life Insurance Policy Credit
• An Identity Theft Program may be available.
• Use of a Credit Union & Buying Club may be available.
• Coverages are subject to the terms and conditions in the actual policy type & its schedules, endorsements or riders.

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