Texas Homeowners Insurance Policy Types

Texas insurance companies may sell several types of policies. If a company offers you a policy with less coverage than you want, ask if other policies are available. You may also be able to add endorsements to your policy for additional coverage.  Purchasing a home insurance policy doesn’t have to be confusing. Contact our expert home insurance agents to find out about the different Texas Homeowners Insurance Policy Types and which one offers the best protection for your valuable investment.

The two home policy types that are sold in Texas are:

• All-risk policies (also known as open perils or comprehensive coverage). These policies offer you broad form protection and cover all causes of loss unless the policy specifically excludes them. Typically HOB, HO3, HO5 policies.
• Named perils policies (also known as specified perils coverage). These policies offer more limited protection than an all-risk policy and cover only the causes of loss specifically named in the policy. Typically HOA, HO2 policies.

Note about replacement cost and actual cash value:

• Replacement cost is what you would pay to repair or rebuild, based on current construction costs. Replacement cost is not market value and does not include your land value. Ask your insurance company if you are not sure how much it would cost to rebuild your house.  Most will require a replacement cost estimate on your policy before providing coverage.
• Actual cash value is what you would pay to replace or  rebuild your property less depreciation. Depreciation decreases your value due to age or wear and tear. If your home is destroyed and you only have actual cash value coverage, you may not be able to completely rebuild your home.

To compare policies approved for sale in Texas, visit the Office of Public Insurance Counsel (OPIC) website at www.opic.state.tx.us