The Texas Department of Insurance defines homeowners insurance as a policy that pays to replace or repair your personal property and house should they be destroyed or even damaged by a policy-covered occurrence or event. Such an insurance policy is a standing contract between you and your insurance company. Needless to say, you should read said policy carefully so that you comprehend precisely what it says, covers, and the limitations of such coverage. In other words, you need to know your rights should you actually need to use such a policy. Fortunately for all parties concerned, Texas publishes such a Consumer Bill of Rights that covers renters insurance and homeowners insurance for your convenience. It is also required by law that your homeowners insurance company sends you this Bill of Rights along with your new policy. Goto a trusted source of getting homeowners insurance in Texas: https://www.texasquotes.com/homeowners-insurance/
There are several key provisions and coverages that most Texas Homeowners Insurance policies have in common.
• Dwelling Policy- pays out should your house be destroyed or even damaged by a covered loss.
• Personal Property- pays you if you lose the items in your home to destruction, theft, or damage. Includes appliances, clothing, and furniture.
• Other Structures- compensates you to rebuild or repair structures that are not attached to your home, including fences, storage sheds, and garages.
• Loss of Use- pays for your extra living expenses should you be forced to move out of your home as a result of covered loss damage. Includes food, housing, and other essential expenses.
• Medical Payments- covers the medical expenses of any people who are harmed while on your property, including some injuries that occur away from your property. Basic policies will cover $500 of medical bills, though you might choose to increase this to as much as $5,000 yourself.
• Personal liability- covers your court costs when defending against lawsuits and pays for damages should you be found responsible for another person’s property damage or injury.
There are two principal kinds of policies that homeowners insurance companies sell in Texas. These are All-Risk Policies and Named Perils Policies. As its name implies, an All-Risk policy protects you against all types of losses, unless it is specifically excluded. Named perils policies are also referred to by their moniker Specified Perils Coverage. These types of homeowners insurance coverage give a more precise range of protection and typically only cover causes of loss that are specified clearly in the policy.
Something that is critical to keep in mind with homeowners insurance policies in Texas is that there is an important and often misunderstood difference between replacement cost and the concept of actual cash value. Replacement cost is just what it sounds like. This is the price that you would shell out to repair or rebuild your house as predicated by the present day construction costs. Replacement cost is not the same as the market value of your home and does not at all take into consideration the value of your property, or land. You definitely should consult with your homeowners insurance company if you do not know clearly what the cost would be to rebuild your damaged or destroyed home.
Actual cash value is the amount that you would have to come out of pocket in order to replace or reconstruct your property, less the cost of depreciation. Depreciation is the decline in value of your property as a result of the natural process of wear and tear or age. All of this is to say that if your home should actually be destroyed, and all that you possess is the actual cash value policy coverage, then you might find you can not rebuilt it completely based on the money the homeowners insurance company sends you. Let the buyer beware.