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Home policies combine several types of coverage into one policy. Most home policies in Texas include these six coverages:

1. Dwelling coverage pays if your house is damaged or destroyed by something your policy covers.
2. Personal property coverage pays if your furniture, clothing, and other things you own are stolen, damaged, or destroyed.
3. Other structures coverage pays to repair structures on your property that aren’t attached to your house. This includes detached garages, storage sheds, and fences.
4. Additional living expenses coverage pays if you have to move while your house is being repaired to fix damages your policy covers. Additional living expenses include rent, food, and other costs you wouldn’t have if you were still in your home.
5. Personal liability coverage pays medical bills, lost wages, and other costs for people that you’re legally responsible for injuring. It also pays if you’re responsible for damaging someone else’s property. It also pays your court costs if you’re sued because of an accident.
6. Medical payments coverage pays the medical bills of people hurt on your property. It also pays for some injuries that happen away from your home – if your dog bites someone at the park, for instance.

Your home policy protects you against different risks, or perils. Risks and perils are things that could damage your house or property. This table shows common risks that most policies do and don’t cover. Coverages vary by company. Read your policy or talk to your agent to be sure of your exact coverages.

Most policies don’t cover damages from:

Fire and lightning

Flooding

Sudden and accidental release of water or smoke

A continuous water leak

policies also won’t cover mold removal, except to repair damage caused by a covered risk

Explosion Termites, insects, rats, or mice

Theft Losses that occur if your house is vacant for the number of days specified by your policy

Vandalism, malicious mischief, riot, and civil commotion

Wear and tear

Aircraft and vehicles

Earthquakes or earth movement

Windstorm, hurricane, and hail (but not if you live on the Gulf Coast) Wind or hail to trees and shrubs

Home policies provide either replacement cost coverage or actual cash value coverage. To be fully protected, make sure your policy has replacement cost coverage.

• Replacement cost coverage pays to repair or replace your house and personal property at current prices. For example, say you bought a new roof 10 years ago and the current price for a new roof is $10,000. If you have to replace your entire roof after a storm, a replacement cost policy would pay for a new roof at today’s prices. If you have a $2,000 deductible, your company would pay $8,000.
• Actual cash value coverage pays replacement cost minus depreciation. Depreciation is a decrease in value because of wear and age. In the same example of the 10-year-old roof, the actual cash value might be $7,000. After your $2,000 deductible, your company would pay $5,000. You’d have to pay the rest of the cost of the new roof yourself. This means your total out-of-pocket costs for an actual cash value policy would be $5,000, compared with $2,000 for a replacement cost policy.

If you have a claim, you must meet a deductible.

A deductible is the amount of a claim that you must pay yourself. For instance, if you have a $1,000 claim and your policy has a $300 deductible, the insurance company will deduct $300 from your claim amount and pay you $700. You might have different deductibles for each type of coverage.

Each type of coverage has a dollar limit. Make sure you have enough coverage to replace your home and property if you have a total loss. If you don’t have enough coverage, you’ll have to pay the difference yourself. Most companies require you to insure your house for at least 80% of its replacement cost. Some companies require you to insure your house for 100% of its replacement cost.

The first page of your policy is the declarations page. It has a summary of your policy, including your coverages, dollar limits, and deductibles.

Home policies usually pay a percentage of your dwelling coverage limit to repair or replace your furniture, clothes, and other property. For example, say you insure your house for $100,000 and your policy covers your property at 20% of that. Your personal property would be insured for up to $20,000.

Home policies limit what they’ll pay for things like jewelry and art. If you own expensive jewelry, art, or other items, talk to your agent about adding more coverage.

Make a list of the items you own.

A complete list of your property will help you decide how much coverage you need and will make filing claims easier.

Update your list regularly. If you can, include the date you bought each item, its value, and its serial number. This is especially important for expensive items. Photograph or videotape each room, including closets, storage buildings, and your garage. Open drawers and photograph what’s inside. Keep the list and receipts for major items in a fireproof safe or at another location. 

Your home policy might not protect you against some risks. You can buy a separate policy or add on to your policy if you need more protection.

Most home policies don’t cover damage caused by floods. If your home is in a designated flood zone, your lender requires you to have flood insurance. But floods can happen anywhere. More than half of homes flooded by Hurricane Harvey was outside of designated flood zones.

If you live on the Texas coast or in Harris County on Galveston Bay, your home policy doesn’t cover wind and hail damage. The Texas Windstorm Insurance Association (TWIA) sells wind and hail coverage for coastal residents. You buy TWIA coverage from local insurance agents. Depending on where you live, you might need flood insurance before TWIA will sell you a policy. You also might need a home inspection by an engineer or a windstorm inspector. 

Home policies provide liability protection, but the amount of coverage is limited. If you want more coverage than your policy provides, you can buy a separate umbrella liability policy.

Most companies offer endorsements, or policy add-ons, that let you increase or add coverage. Common endorsements include coverage for:

• Jewelry, fine arts, or electronics (your policy provides some coverage, but it might not be enough to cover expensive items).
• Backup of sewers or drains.
• Damage to foundations or slabs.
• Extra construction or repair costs to meet local building codes.
• Extra construction costs if your policy doesn’t pay enough to rebuild your home.
• Mold removal.
• Damage from earthquakes.

Most policies won’t pay for damages or injuries that occur during short-term rentals. If you rent out your house for short-term lodging, ask your insurance agent if you’re covered. You might need to buy more coverage.

If you’re a guest in a short-term rental, your home or renters policy might cover you if you damage a host’s property. Ask your insurance agent before you rent. If you’re renting through an app or website that offers insurance coverage, ask your agent if you need it.

• Renters insurance covers your clothes, furniture, and other personal property if they’re stolen or damaged while you’re living in a rented house or apartment. Renters insurance won’t pay to fix the house or apartment building. The building owner’s policy does that. You might not need renters insurance if you’re still a dependent. Your parents’ home policy might cover your property, even if you’re not living at home.
• Condominium insurance covers your personal property and the interior of your unit. It also provides liability protection and pays additional living expenses.
• Townhouse insurance can either cover the interior and exterior of your townhouse, or just the interior. The difference depends on whether the homeowners association has a master policy that covers the exterior. If it does, you can buy a policy that covers only the interior. If the association’s master policy doesn’t cover the exterior, you can buy a policy that covers both the interior and exterior. Townhouse insurance also covers your personal property and provides liability and additional living expenses coverage.
• Mobile home insurance covers the mobile home, your personal property, and additional living expenses. It also provides liability coverage.
• Farm and ranch insurance is for homes outside city limits on land used for farming and raising livestock.

Texas law requires insurance companies to charge rates that are fair, reasonable, and adequate for the risks they cover. We don’t approve rates in advance, but if we find that an insurance company’s rates are too high, we can require it to pay refunds to the people it overcharged. Insurance companies may appeal our decisions.

Insurance companies use a process called underwriting to decide whether to sell you a policy and how much to charge you. The amount you pay for insurance is called a premium. Each company’s underwriting rules are different. This means one company might be willing to sell you a policy, even if another company isn’t. It also means that different companies charge different rates.

Most companies consider these things when deciding on your premium:

• Your home’s age and condition. Companies can’t turn you down just because of your home’s age or value, but they can charge you more.
• Your home’s replacement cost. Houses with higher replacement costs have higher premiums.
• Construction materials. Premiums are higher for houses built completely of wood. They’re lower for houses built of brick or stone.
• Where you live. Premiums are higher in areas that have more storms or crime.
• Availability of local fire protection. Premiums are lower for houses that are close to fire stations.
• Your claims history. Your premiums might be higher if you’ve had claims in the past.
• Your credit score. Some companies use your credit score to decide what to charge you. Your premiums will be lower if you have good credit. A company can’t turn you down based only on your credit, however.

Most companies use the Comprehensive Loss Underwriting Exchange (CLUE) to learn your claims history. CLUE reports show the claims history of people and houses, regardless of who owned them, for the last seven years. A company can charge you more or refuse to sell you a policy based on the information in your CLUE report.

Companies can report information to CLUE only if you filed a claim. You can challenge wrong information. You can get a free copy of the report each year. Call LexisNexis at 866-312-8076.

Discounts help lower your premium. Each company decides what discounts to offer and the amount of the discount. You might be able to get a discount if you have:

• A monitored burglar or fire alarm system.
• A sprinkler system.
• An impact-resistant roof.
• A newer home or a home in good condition.
• Other policies with the same insurance company.
• No claims for three years in a row.

An insurance company may not:

• Turn you down or charge you more because of your race, color, religion, or national origin.
• Turn you down or charge more because of your age, gender, marital status, geographic location, or disability unless the company can show that you’re a greater risk for a loss than other people it’s willing to insure.
• Turn you down, charge you more, or treat you differently than other people in your rate or risk class unless the company can show that you’re a greater risk than others.
• Turn you down or charge you more only because of your credit score.