Protecting Your Family and Property
HO-A policies do not provide replacement-cost coverage, but you may be able to add it with an endorsement for an additional premium. Companies use various methods to determine the estimated replacement cost of your home. Be prepared to answer questions about your home’s square footage, number of bedrooms and number of bathrooms. Inform the agent of any custom features that are part of the house.

When calculating your home’s replacement cost, deduct the value of the land, foundations that are below ground and other items, such as landscaping and lawn sprinkler systems. Construction costs change, so it’s wise to update your coverage amounts annually.

Household contents automatically are covered only for their “actual cash value.” Actual cash value is the replacement-cost minus depreciation. You can buy replacement-cost coverage for your possessions as an endorsement. Homeowners policies offer very limited coverage for valuables like jewelry, furs, cash and stamp and coin collections. You can buy separate endorsements to increase your coverage.

According to TDI, a homeowners policy includes five different types of insurance coverage:
  • Dwelling. This pays for damage to your house and any outbuildings, such as detached garages and storage sheds.
  • Personal property. The policy pays when household items, including furniture, clothing and appliances, are damaged, stolen or destroyed.
  • Liability. This protects you against financial loss if you are 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. This covers payment of medical bills for people injured while 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. This will cover living expenses if your home is too damaged to live in during repairs. Typically, a policy pays up to 20 percent of the amount for which your house is insured.

— Factors That Affect Your Premium
Your premium will be based on several factors. According to TDI, these include the following:
  • Where you live
  • Level of fire protection available in the area
  • Construction type of your home (brick or frame)
  • Type of policy you purchase
  • Amount of coverage you buy

— Lowering Your Premium by Increasing Your Deductible
Texas homeowners policies generally carry a basic deductible of 1 percent ($1,000 on $100,000 of coverage) of the insured value of the dwelling. Deductibles are available as high as 5 percent and as low as $100, although not all companies offer deductibles that low. If you raise your deductible, you’ll have to pay more out of pocket for repairs and replacement costs before your insurance company will begin to pay.

Other Types of Homeowners Insurance
If you’re new to the Houston area, it’s important to know about potential natural disasters that may arise, particularly due to heavy storms, floods and hurricanes. Depending on where you are interested in living in the Houston region, do some research and ask questions of your real estate agent and others.

Many residents in the Houston area have learned that even if a hurricane misses the region, it can leave behind wind damage, storms and heavy rain that can cause flooding. Even if flooding wasn’t an issue, high winds can cause major damage to a home, its occupants and contents, particularly if the property is located near a lake or along the Gulf Coast.

Once natural disasters strike, it’s too late to get insured so it’s a decision that has to be made with planning in mind. June 1 is the official start of the hurricane season, and it officially ends on November 30. If being protected against these natural disasters is important to you, learn more from the information following.

— Flood Insurance
The city of Houston participates in the National Flood Insurance Program (NFIP), a federal program that enables residents and business owners in participating communities to purchase insurance protection against losses to structures and contents from flooding. This is important because protection against losses from flood damage is not typically included in basic homeowners insurance coverage.

The city of Houston advises that all residents obtain flood insurance for their homes and businesses. The cost of flood-insurance coverage is generally very low compared to the potential cost of damage that can be caused by flooding. Contact your property insurance agent for more information on how to obtain flood-insurance coverage.

The flood-insurance rate maps for Harris County recently were revised as part of the Harris County Flood Control District’s Tropical Storm Allison Recovery Project. The current Harris County rate maps may be viewed at More information on the NFIP and flood insurance may be obtained at or National Flood Insurance Program at

— Hurricane and Windstorm Insurance
The Texas Windstorm Insurance Association (TWIA) was established by legislative mandate to provide wind and hail insurance for Texas Gulf Coast property owners in the event of catastrophic loss. It provides “basic” coverage unavailable in traditional markets for consumers who might otherwise be left uninsured.

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