Homeowners insurance provides
you financial protection in the event that your home is destroyed or damaged
due to unforeseen or a catastrophic event. In addition to your home,
homeowners insurance also covers your belongings (or personal property) and
can reimburse you for medical expenses and liability claims resulting from
property damage or personal injury to other people caused by you or members
of your family.
Homeowners insurance protects you from
financial losses caused by storms, fire, theft, and other events outlined in
your policy. It is important to know what’s in your policy. Make sure you
read your policy carefully and understand your specific coverages.
There are two basic types of coverage:
"ALL PERILS" COVERAGE - offers broad protection
and covers all perils unless they are specifically excluded or limited by
"NAMED PERILS" COVERAGE - offers narrower
protection than an all risk policy and covers only those perils specifically
named under the policy. A named perils policy will also contain exclusions
to perils named under the policy.
Policies also offer different methods of repairing or replacing your
REPLACEMENT COST - pays for all necessary
expenses associated with rebuilding, replacing ,or repairing damaged
property, up to the policy limits , and , less any applicable
deductible amount. This coverage generally provides customers with the
largest amount of financial recovery from a covered loss as an insurance
company must repair or replace covered property up the full dollar amount
required to provide products or materials of equal workmanship, like kind,
and/or quality to up to your policy limits. Even if this means replacing
older products with a newer product of equal workmanship , like kind , or
quality where repairs to your are property are not possible or prudent;
within the insurers judgment. To receive full replacement cost you must
actually replace such property per the terms of your policy; other wise you
will only receive payment of your claim at Actual Cash Value. Without
question replacement cost coverage produces the greatest level of customer
satisfaction when customers receive insurance claim payments.
ACTUAL CASH VALUE - factors in depreciation
costs to your claim and pays you the costs to replace or repair the damaged
property, less this depreciation and less any applicable deductible amount.
PLEASE NOTE, EVEN WITH ENDORSEMENTS/AMENDMENTS,
THE HO-A IS A NAMED PERILS POLICY AND DOES NOT COVER ALL PERILS COVERED
UNDER THE HO-B " BROAD FORM '"OR HO-C “ALL RISK” POLICY FORMS - See
Comparison Chart Below.
Major Coverages That Are Typically
You can buy a dwelling policy that covers
only the structure of your house. However, most homeowners buy policies that
combine five different coverages in a single policy:
Dwelling - pays for
damage or destruction to your house and any unattached structures and
buildings, such as fences, detached garages, and storage sheds.
Personal property - pays
for theft, damage, or destruction of the contents of your house, including
furniture, clothing, and appliances
Personal Liability - protects you
against financial loss if you are sued and found legally responsible for
someone else’s injury or property damage. A homeowners policy automatically
provides $25,000 with increased limits available up to $ 300.000 or $
500,000 (this limit varies by insurer) in coverage for less than $ 25
annually . Most insured's may buy up to $ 1 million to $5 million in
additional coverage under a Personal Umbrella Liability Policy for annual premiums
typically ranging from $ 150 to $ 600..
Increased Personal Liability Insurance Coverage Limits Are
Always Recommended By Our Agency
Please keep in mind that you are responsible for any
amount of a covered personal liability loss that exceeds the amount of
personal liability insurance coverage you purchase under your homeowners
policy; therefore we highly recommend you consider securing higher limits of
personal liability insurance coverage under your homeowners policy to
protect your assets in the event of a large liability settlement or where a
count renders a judgment against you for a large dollar amount. We would
also recommend you request a quote for a Personal Umbrella Liability Policy
for those unforeseen or catastrophic events where you might be found liable
for an amount exceeding your homeowners policy limits . Recent court
judgments have given substantial awards to claimants for wrongful death ,
pain & suffering due to injuries , medical expenses , loss of income,
and property damage due to the negligence of another party ( at fault
homeowner ) involved in an personal liability cases.
Medical payments - pays
medical bills for people hurt 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 - pays
additional living expenses if your home is too damaged to live in during
repairs. Most policies pay 10 to 20 percent of the amount of your dwelling
Standardized Policy means the policy language and
coverages provided by these policies are the same, regardless of the company
writing the policy. Although such a policy written by one company will be
exactly the same as a policy written by another company, the two companies
may charge different rates.
Companies that offer Alternative Policy Forms, may only
do so if such policies are approved in advance by the Commissioner of
Insurance. These policies are not standardized and often provide varying
limits or other limitations on several coverages or covered perils offered
under a standardized Texas Homeowners or ISO Homeowners policy form.
Read these Alternative Policy Forms very carefully to
know exactly what coverages are included.
Some companies may sell more than one policy form but
insurance agents/agencies often only one policy form to customers. If a
company offers you a policy with less coverage than you’d like, ask your
agent if other policy forms are available. You also may be able to add
additional coverage by buying endorsements to your base policy.
Coverage may differ considerably from one company to
another and from the coverage provided in the standardized Texas or ISO
What Homeowners Policies Do and Don’t Cover
Cover Losses Caused by
||Most Policies Do
Not Cover Losses Caused by
|Fire and lightning
|Aircraft and vehicles
|Vandalism and malicious mischief
||Insects, rats, or mice
||Freezing pipes while your house is
unoccupied (unless you turned off the water or heated the building)
|Riot and civil commotion
||Wind or hail damage to trees and shrubs
||Losses if your house is vacant for 60
days or more
|Windstorm, hurricane, and hail
||Wear and tear or maintenance
|Sudden and accidental water damage that
includes freezing pipes; however the limits or amount of coverage
available for such losses may vary widely among the policies forms
offered by different insurance companies.
(Note: The ISO HO-3 " All Perils " and Texas HO-B " Broad Form " Policy Form includes coverage up the full policy
limits of the primary building coverage ) .
|Water damage resulting from continuous
and repeated seepage
(Note: The Texas HO-B " Board Form " Policy Forms does
include coverage for continuous and repeated seepage)
Companies may exclude coverage for certain losses. For example, if you
live on the Gulf Coast, you might receive an endorsement that excludes
coverage for wind and hail damage. In areas with a history of hail storms,
some companies provide only actual cash value coverage instead of full
replacement cost for roofs. Actual cash value pays for damage minus
depreciation on the roof, depending on its age and condition.
Most policies will not cover mold remediation beyond that necessary to
repair or replace property damaged caused by a water loss otherwise covered
by the policy. The HO-A policy doesn’t cover mold remediation or damage
caused by water leaks, but some companies offer an endorsement that covers
sudden and accidental water leaks. Some, but not all, of the other approved
policy forms also cover sudden and accidental water leaks. Read your policy
or ask your agent whether your policy covers water leaks and mold
Insurance companies are required to offer you mold remediation coverage.
Depending on the company, this coverage will be offered in dollar or
percentage increments up to 100 percent of your policy’s limits. If you have
questions or concerns about how a mold claim is being handled, or if you
need information about how to minimize mold losses, ask your insurance
company for a set of guidelines regarding mold claims. Also read TDI’s
Handling Water-Damage and Mold Claims publication.
For a side-by-side comparison of the coverages provided by the policy
forms approved for sale in Texas, visit the website of the
Public Insurance Counsel (OPIC)
Standardized Types of Homeowners Policy Forms
Offered In Today's Texas Insurance Market:
The Insurance Services
Office ( ISO ) Homeowners Insurance Policy was developed and implemented
nationwide in the 1950's as one of the best "package" policies available to
insure your home. It combines both property and liability coverage
conditions into a single policy with a indivisible premium charge.
The Texas Standard
Homeowners Policy Form was developed & regulated during the same
time period by the Texas Department Of Insurance (TDI) which remained unique
and virtually unchanged until October 1, 1990, when the "readable" Texas
Homeowners Policy was implemented.
Due to the recent
guidelines issued by the Texas Department Of Insurance (TDI) companies may
now offer a wide variety of homeowners policy forms to Texas residents.
Many such policies closely
track the format of that the Insurance Service Office ( ISO) Policy
Form that was developed by ISO and is currently offered in most other
However, insurance companies
may also offer alternative policy forms if TDI approved ; these alternative
policy forms may offer significantly lower coverage limits or no coverage
for several kinds of perils than would otherwise be covered under a
standardized Texas Standard Homeowners Policy Forms or standardized
ISO Developed Policy Forms .
While Texas insurance companies may offer
several types of policies in Texas, each with a different level of coverage
, the vast majority of insurance companies have chosen to offer one or more
of the standardized policy forms & endorsements as follows:
Our agency staff highly
recommends that you consider a ISO HO-3 or Texas HO-B Policy Form; approximately 80 % of
Texas homeowners have elected these homeowners policy forms for their home.
These Policy Form are regarded my many knowledgeable insurance
professionals as among of the best available values in today's insurance
market in terms of cost vs coverage.
Texas Homeowners Policy
Specimen Texas Forms
Texas Property Endorsement Forms:
(Note :These endorsements are used to increase , add, change, delete, or
reduce coverage of homeowners policy forms )
HO-101 - Replacement Cost For Personal Property
- Provides limited
replacement cost coverage on personal property, including scheduled
property. It does not apply to items which are irreplaceable, not in
good condition or obsolete. Replacement cost of watercraft is covered
only up to a limit of $2,500 in excess of ACV. When HO-101 is attached
to coverage forms HO-B and HO-C, wall-to-wall carpeting and cloth
awnings are provided replacement cost coverage, but fences would still
not be covered on a replacement cost basis. The form provides for
recovery up to $1,500 of the difference between replacement cost and
ACV, without requiring actual replacement of the property. The insured
has up to 365 days to replace property in order to recover in excess of
HO-130 - $250 Theft Deductible
Applicable only to tenant and condominium forms, this form applies a at $250
deductible to the peril of theft. The deductible shown in the Declaration
for Deductible Clause #3 applies to losses caused by other perils.
HO-102 - Agreed Amount On Dwelling
Available for use with forms HO-B and HO-C
only, this endorsement essentially waives the requirement for an amount of
insurance equal to at least 80% of replacement cost on the dwelling as
required for Replacement Cost Coverage.
HO-105 - Residence Glass Coverage
Provides glass breakage coverage on glass which is permanently attached to
the described dwelling or other private structure on the premises. Coverage
may be written on scheduled items with a specific limit, and/or may include
all glass on an unscheduled basis with a at limit of $100 maximum on any one
pane or plate. No deductible applies to the coverage provided by this
endorsement. The basic policy and the endorsement may coordinate to cover a
glass breakage claim.
Vandalism damage to one plate worth $350; deductible #2 is $250:
- Basic policy
pays $100 ($350 less $250 deductible)
- HO-105 pays
Example #2: Hail
storm breaks five windowpanes worth $50 each, 5 panes worth $125 each, and 2
doors worth $250 each (total damage$1,375); deductible #1 is $250.
- Basic policy
pays $1125 ($1,375 less $250 deductible)
- HO-105 limits
5 @ $50, 7 @ $100, total $950, but only pays $250 to indemnify for
HO-140 - Windstorm, Hurricane and Hail Exclusion
(HO-A, HO-B, HO-C, HO-CON-B and HO-CON-C only)
Applicable only to property in one of the
"first tier" counties along the coast, this eliminates the perils of
windstorm, hurricane and hail from the policy with regard to direct and
indirect losses to covered property. Certain indirect losses resulting from
windstorm, hurricane and hail are excepted from the exclusion, leaving
coverage on the homeowners policy for loss of rents and rental value, and
additional living expenses for a secondary residence.
Independent Agent's Handbook article on the wind pool [TWIA] in the below
Technical Resources Section of this web page).
HO-110 - Increased Limit on Jewelry, Watches and Furs
Increases the special limit of $500 on these
items. The total limit desired up to a maximum of $5,000 is shown in the
HO-140B - Windstorm, Hurricane and Hail Exclusion
(HO-BT and HO-CT only) -Same
HO-140, except wind driven rain losses under an HO-CT are not
excluded by this form.
HO-111 - Increased Limit on Business Personal Property
the special limit of $2,500 on business property. The total amount
desired (no maximum) would be shown in the Declarations.
HO-112 - Increased Limit On Money/Bank Cards
Increases the special limit of $100 on Money / Bank cards. The total
amount desired (no maximum) would be shown in the Declarations.
HO-145 - Exclusion of Cosmetic Damage to Roof
Coverings Caused by Hail -
damage to the roof covering caused by hail. Applies only to metal roofs for
which the insured is receiving a premium credit.
HO-113 - Increase Limit On Bullion / Valuable
the special limit of $100 on Money / Bank
cards. The total amount desired (no maximum) would be shown in the
HO-160 - Scheduled Personal Property
insurance on scheduled items within the classes of property shown on the
endorsement. Jewelry and Fine Arts are insured on an agreed value basis.
Other property is insured at actual cash value, unless replacement cost
HO-101 is attached.
The coverage provided is "all risk" and no deductible applies. Any items
scheduled here are not covered on the basic policy due to
paragraph "1." under Property Not Covered.
Coverage applies anywhere in the world, except Fine Arts which are limited
to the U.S. and Canada. The following basic exclusions apply to all classes:
nuclear, war, wear and tear, gradual deterioration, moths, vermin or
inherent vice. Newly acquired property of the same class as is scheduled is
covered automatically for up to 90 days for an amount not exceeding 25% of
the amount on that class.
See the chart for specific provisions applicable to
each class of property.
(See also: "Scheduled
Personal Property Valuation" and "Jewelry
HO-115 - Loss Of Use Due To Mandatory Evacuation
Applicable only to Policy Forms HO-A / HO-B / HO-C ) - When your
dwelling is subject to a mandatory evacuation order by a civil authority
to evacuation additional living expenses is after 1st 24 hrs are covered
up to 14 days.
Scheduled Personal Property -
Identical to HO-160, except provides for valuation of scheduled jewelry
items on a modified actual cash value basis. The insurer can settle jewelry
losses for the LEAST of the following amounts, unless the insurer at its
option replaces the item with one of like kind and quality: (1) the amount
for which the item can be repaired to its pre-loss condition; (2) the amount
for which the item can be replaced with a substantially identical item; or
(3) the amount shown in the schedule. Insurers are not required to use the
HO-160A and may use the HO-160 either optionally or exclusively. To use the
HO-160A, an insurer must tell TDI that it intends to do so. It is also
possible for companies to file their own versions of this endorsement. (See
HO-115A - Loss Of Use Due To Mandatory Evacuation
( Applicable only to Policy Forms HO-BT / HO-CT / HO-B_Con /HOC_Con ) -
When your dwelling is subject to a mandatory evacuation order by a civil
authority to evacuation additional living expenses is after 1st 24 hrs
are covered up to 14 days.
or Other Microbes Coverage -Adds a separate limit of insurance (not
additional insurance) for the necessary and reasonable expense to remediate,
repair or replace covered property for loss caused by ensuing mold resulting
from water damage otherwise covered by the policy. Includes additional Loss
of Use arising from a covered mold loss for the additional time required to
remediate, repair or replace the damaged property. Establishes the separate
limit as the maximum limit of coverage for all mold losses during the policy
period. The limit of insurance is shown on the declarations page. The Texas
Personal Lines Manual provides for limits options of 25 percent, 50 percent
and 100 percent of the Coverage A, Coverage B and Loss of Use limits, but
insurers may offer other optional limits up to and including 100 percent.
technical article "Mold
Loss Of Use Due To Loss Of Utilities
( Applicable only to Policy Forms HO-A / HO-B / HO-C )-
Applies to loss or interruption of
electricity , water , sewer, natural gas due to a covered peril after
1st 24 hrs are covered up to 14 days not to exceed 10% of Coverage A
HO-170 - Additional Extended Coverage Endorsement
Applicable to coverage form HO-A only. Adds
additional named perils to the Perils Insured Against section for both the
dwelling and unscheduled personal property. Since this endorsement includes
loss caused by accidental discharge of water, it contains an exclusion of
mold damage similar to the HO-161A described above.
HO-116A Loss Of Use Due To Loss Of Utilities
(Applicable only to Policy Forms HO-BT / HO-CT / HO_B_Con / HO-C_Con )
applies to loss or interruption of electricity , water , sewer,
natural gas due to a covered peril after 1st 24 hrs are covered up to 14
days not to exceed 10% of Coverage A (Dwelling) limit.
HO-180 - Condo Unit Owners Outbuilding and Other
Structures Coverage -
Adds a specific limit of liability for structures on the condominium
premises which are owned solely by the insured. Coverage is limited to the
named perils when this form is attached to HO-B-CON. The limit is shown in
HO-120 - Windstorm Coverage for Television Antennas
-Provides coverage for TV or radio antennas
and masts, outside satellite dishes and their lead-in wiring. Requires
description. Must be on the declared residence premises. Named peril
coverage including fire, lightning, theft, vandalism, wind. Requires a limit
be stated on the declarations page. No deductible.
HO-301 - Additional Insured Endorsement
-With regard to Section I, this endorsement
should be used for the following situations:
- A dwelling
owned and occupied by co-owners. One of the Co-owners would be the
named insured and the other would be named here as an additional
insured applicable to the dwelling only. A separate tenant homeowners
policy could be issued for the additional insured to provide Coverage
B and Section II coverage for that person.
included as an asset of an estate and occupied by an heir. The
occupant would be the named insured and the representative of the
estate would be named as the additional insured.
under contract of sale. The occupant-buyer would be the named insured
and the seller is the additional insured.
occupied by mother, father, son, daughter, grandparent or grandchild
of the owner. The owner would be the named insured and the relative is
the additional insured.
owned by a "living trust." The occupant would be the named insured and
the trust is the additional insured.
HO-121 - Windstorm Coverage for Greenhouses
Provides wind, hurricane, hail coverage for
greenhouses, without which it would be absent in the policy. Requires
description of greenhouse, and that it be located on the declared residence
premises. Requires a limit be stated on the declarations page.
HO-305 - Amended Definition of Residence Premises
Used when a newly purchased home will
not be occupied immediately. The basic policy allows up to 60 days of
unoccupancy in such a situation; this endorsement extends the time period to
90 or 120 days.
HO-122 - Windstorm Coverage for Cloth Awnings
Provides windstorm, hurricane and hail
coverage. Requires a limit be stated on the declarations page. No
HO-380 - (For HO-B-CON)
HO-381 - (For HO-C-CON)
- Unit Owners Rental to
Amends the coverage form to cover personal
property in a unit which is frequently rented to others. This does not
delete the exclusion relating to theft of money, securities, jewelry or furs
from the unit while it is rented. It also deletes the liability exclusion
with regard to the rental of the described unit.
HO-125 - Physicians'
Surgeons and Dentists Outside Coverage -Coverage
B (Personal Property) applies to surgical, medical and dental instruments,
apparatus , medicines and books while away from the insured's office and
away for the residence premises. The bag, kit or instrument case in which
such property is contained is included under this coverage.
HO-382 - Loss Assessment Coverage
Adds a specified limit of coverage
shown in the Declarations, for amounts which the insured may be assessed in
accordance with the condominium governing rules. The assessment must result
from damage to the condominium property caused by peril insured against in
the HO-B-CON or HO-C-CON, or an occurrence for which the condominium
association is legally liable and a Section II exclusion in the HO-B-CON or
HO-C-CON does not apply. A special deductible of $250 applies to any loss
payable under this endorsement. If the assessment is the result of a
deductible in the condominium's master policy, this endorsement will pay no
more than $1,000.
HO 126 - Personal Computer Coverage
Provides higher limits
and deletes the off-premises limitations (10% or $100, whichever greater).
Broadens perils, reduces deductible to $100. Does not limit coverage to
personal-use-only. Requires a limit be stated on the declarations page.
Allows for "other insurance" in Coverage B to be excess. See also:
"Functional Valuation Needed for Computers"
in the CPP technical reports, and
"The BOP is Not for Everyone", which
suggest a full-blown computer policy including business interruption
coverage, and extra expense coverage.
ISO Homeowners Polices and
Many times the title of
the endorsement provides sufficient explanation of the coverage. These notes
provide a general overview of their uses and the main changes accomplished
by their attachment to the various homeowners forms. Refer to full copies of
these forms to determine all the terms, conditions and exclusions. Along
with these ISO endorsements individual companies can file their own in
addition to or instead of these forms. Always secure specimen copies of
these company unique endorsements to evaluate what changes are accomplished
by the form.
ISO Specimen Homeowners Coverage
ISO Endorsements / Optional
Coverages / Special Provisions
Endorsements are presented in
numerical order. If an endorsement applies only to Section I then (I)
precedes the explanation. If an endorsement applies only to Section II then
(II) precedes the explanation. When the endorsement changes both sections of
the policy then (I/II) precedes the explanation.
HO 01 42 - Special Provisions - Texas
(I) This endorsement
change the ISO developed policy forms to confirm to specified mandatory
Texas homeowners policy language or policy provisions required by Texas
endorsement makes it a condition of the policy that should a contract exist
with a privately owned fire department, that it be maintained for the policy
(I) Since only one
deductible is anticipated in the policy wording, this deductible is
necessary to achieve a separate deductible for wind and hail losses. It can
be used on all forms except HO 4 and HO 6.
endorsement extends Coverage B - Other Structures limit to owned structures
that are not located on the “residence premises” but are used by the named
insured in connection with the “residence premises.” It can be used with the
HO 2, HO 3, and HO 5 only.
(I) If any party
other than an “insured” or mortgagee has an insurable interest in the
“residence premises” that person or organization shown on the endorsement is
provided coverage for that interest and is granted cancellation and
nonrenewal notice. This can be used when there is a co-owner occupant of a
multi-family dwelling or for a mortgagee co-signer non-occupant.
endorsement is similar to the
HO 04 91,
but sets up a specific limit for each structure.
referred to as ‘guaranteed replacement cost’ this endorsement will allow
loss payment in excess of policy limits if the insured has set their policy
limits based on property evaluations made by the insuring company with
adjustments for inflation. It can be used on HO 2, HO 3 and HO 5 only.
(I) This provides
up to $500 coverage (subject to a special $100 deductible) for loss of
contents of a refrigerator or freezer if there is a loss of power or a
mechanical failure of the storage unit. The loss of power must be due to
conditions beyond an “insured’s” control.
(I) This allows a
selected limit to be provided in excess of the $2,500 sub-limit contained in
the form. It also increases the off premises business property limitation to
20% of the total increased limit. The increased limit does not apply to home
(I) This adds
Section I coverage for loss caused by collapse of earth that supports
property resulting from voids beneath the surface of the ground created by
water washing against limestone or similar rock formations.
(I) With this
endorsement the insured formally agrees to maintain these systems and advise
company of their change or removal.
(I/II) In this
endorsement the names of the student and school is listed so that Section I
and Section II coverages apply to the “insured” student. The student has
insured status only while enrolled in the scheduled school and residing at
the address shown on the endorsement.
(I) When multi-year
term policies are written this endorsement allows the premium to be paid in
annual installments. Endorsements ISO Homeowners 01/04 125
endorsement sets a specific limit and deductible for ‘all risk’ coverage for
the recreational use of described golf carts, subject to exclusions
contained in the endorsement.
(I) This allows the
loss payment to be in excess of the policy limits for a pre-selected 25% or
50% of Coverage A increase. It is similar to the HO 04 11 but is restricted
to a pre-selected increase amount and pertains to Dwellings only. It can be
used on HO 2, HO 3 and HO 5 only.
(I) This provides
for loss settlement on buildings to be based on the “cost to repair or
replace the damaged building with less costly common construction materials
and methods which are functionally equivalent to obsolete, antique or custom
construction materials and methods used in the original construction of the
building.” It can be used with the HO 2, HO 3, and HO 5 only.
(I) The endorsement
is only used on HO 8 and broadens the theft peril to apply to theft of
property contained in any bank, trust or safe deposit company, or public
warehouse (considered to be an ‘on the “residence premises” loss’), and
allows for a limit to be established for theft losses occurring off the
“residence premises.” It is also used to increase the policy’s $1,000
maximum loss limit for theft to any selected amount shown on the
(I) This amends the
Coverage C Theft exclusion to allow for theft coverage of personal property
from that part of the “residence premises” rented to a roomer or boarder as
long as the ‘renting out’ is on an occasional (as opposed to regular) basis.
endorsement sets a separate limit above the $1,000 additional coverage for
Section I type losses and Section II type losses. And sets a maximum of
$1,000 if the assessment is the result of a deductible in the policy of
insurance purchased by a corporation or association of property owners.
Section I deductible would apply.
establishes “insured” status for a trustee, beneficiary and/or grantor named
on the endorsement as regards Coverage C - Personal Property, Coverage D -
Loss of Use, Coverage E - Personal Liability, and Coverage F - Medical
Payments to Others. It also conveys cancellation and non renewal notice
rights to whomever is named on the endorsement.
endorsement sets a separate limit and deductible for any property
association’s assessment stemming from an earthquake loss. Minimum $250
deductible will apply.
endorsement increases the $2,500 Additional Coverage limit to a selected
amount per unit.
(I/II) When a
separate structure located on the “residence premises” is rented to others,
this endorsement is used to include both Section I and Section II coverage
for this building. The limit is selected for the structure’s physical damage
(I) Used with the
HO 4 only, this endorsement sets up ‘all risk’ coverage for Coverage C
items, subject to exclusions contained in the endorsement.
(I/II) This conveys
“insured” status in Coverage A - Dwelling, Coverage B - Other Structures.
Also provides Coverage E - Personal Liability, and Coverage F - Medical
Payments to Others coverage, but only with respect to bodily injury or
property damage arising out of the “residence premises.” It also grants
cancellation and nonrenewal notice to the additional insured. This can be
used when the home is being sold under contract of sale, naming the seller
as the additional insured. This can also be used when the home is a
multi-family structure to establish coverage under one policy for the
HO 05 80,
HO 05 81,
HO 05 82 - Property
Remediation For Escaped Liquid Fuel and Limited Lead and Escaped Liquid Fuel
(I/II) This sets up
a Section I limit for remediation and a separate Section II policy aggregate
limit for events involving the escape of liquid fuel from a storage
container with storage capacity of 100 or more gallons of liquid used to
fuel heating or cooling systems of a building, water heaters, ovens or
stoves, or to power motor vehicles or watercraft owned by the insured but
not used primary in business.
endorsement can be used if an office, private school or studio type business
is conducted on the “residence premises” whether in the dwelling or in
another structure. If business is conducted in another structure, it allows
for the establishment of a separate limit on the structure. The endorsement
also provides for the abolishment of the $2,500 business personal property
sub-limit and provides Section II coverage for the necessary or incidental
use of the “residence premises” to conduct the described business.
(I/II) For discussions of
these various endorsements, please refer to the separate section entitled
‘Home Business Insurance Options.’
endorsement sets replacement cost valuation for reinforced-masonry walls;
metal, fiberglass, or plastic/resin fences; patio and walks (not made of
wood); and, driveways.
Used with HO 2, HO 4 and HO 6, this
amends the water exclusion to clearly preclude coverage for tsunami, storm
surge, and escape or overflow from a dam, levee, seawall or any other
boundary or containment system.
endorsement sets a separate limit for remediation, testing and loss of use
for losses involving fungi (mold) or other microbes proximately caused by a
covered cause of loss.
Used with HO 3 and HO 5, this amends
the water exclusion to clearly preclude coverage for tsunami, storm surge,
and escape or overflow from a dam, levee, seawall or any other boundary or
establishes a percentage amount that increases limits of Coverages A, B, C
and D pro-rated during the policy period.
(I/II) This is used
with HO 6 to provide coverage under Section I and II while the unit is
rented or held for rental. Certain classes of property (money, securities,
jewelry) are not included as regards theft coverage, but other than these
property limitations, theft coverage is retained for the rented property.
establishes a separate limit in addition to Coverage B limit for
specifically described detached structures on the residence premises.
(I) Used with the
HO 6 only, this amends the other insurance clause as regards other insurance
or service agreements to set the coverage under the HO 6 as excess to the
amount due under other insurance or a service agreement in the name of a
corporation or association of property owners whether proceeds from the
service agreement are collectable or not.
(I) If the
insured’s secondary residence is a rented unit the insured may have an
insurable interest in any improvements made to the rented residence. These
building property items can be protected by this endorsement.
(I) Used with the
HO 6 only, this endorsement sets up ‘all risk’ coverage for Coverage C
items, subject to exclusions contained in the endorsement.
(I) To increase the
10% extension to person property at other residences, this endorsement
provides an additional limit of coverage.
(I) Used with the
HO 6 only, this endorsement sets up ‘all risk’ coverage for Coverage A
items, subject to exclusions contained in the endorsement.
(I) Used on the HO
4 only, this endorsement increases the 10% of Coverage C limit to provide
for the improvements made to the residence occupied but not owned by the
(I) (This replaces
HO 04 56)
This is used to reduce 80% insurance to value requirement in order to
achieve replacement cost on buildings and sets jewelry at replacement cost
without deduction for depreciation. Replacement cost loss payment can be
based on insurance to 50%, 60% or 70% to value instead of the 80% as
required in the Loss Settlement clause. Used on HO 2, HO 3 and HO 5 only.
(I) This is added
to pick up coverage to livestock owned by the insured and killed as the
result of a vehicle accident. Maximum provided per head of livestock is
(I) (This replaces
HO 04 61)
This endorsement provides specific, scheduled coverage for Furs, Cameras,
Musical Instruments, Silverware, Golfer’s Equipment, Fine Arts, Postage
Stamps, and/or Rare and Current Coins. All risk coverage is provided to
scheduled items (subject to endorsement exclusions) with losses on all types
of property valued on a replacement cost basis if used in conjunction with
the HO 23 04
- Personal Property Replacement Cost Loss Settlement -Texas endorsement.
Only fine arts is provided coverage on an agreed value basis. Special loss
settlement provisions are provided for Postage Stamps and Coins. See
HO 04 60 to provide
coverage on an agreed value basis.
endorsement is used to set up an additional amount of coverage above the
$500 Additional Coverage provided for these types of losses.
(I) (This replaces
HO 04 90)
This provides replacement cost loss valuation on personal property, awnings,
outdoor antennas, outdoor equipment, carpeting and household appliances. It
also extends replacement cost to scheduled personal property items not
subject to agreed value or other special loss provisions when the
HO 23 03 - Scheduled Personal Property
Endorsement - Texas is attached. When attached to the HO 4, this endorsement
also provides replacement cost on building additions and alterations.
(I) This adds the
peril of earthquake to the policy subject to a special deductible. Damage to
the exterior masonry veneer is excluded; but, by additional premium, this
exclusion can be deleted.
(I) (This replaces
HO 04 93)
The title says it all. The inclusion of this endorsement does not change the
limit of coverage for the dwelling or other structure (building items).
Replacement value of the entire dwelling should be used to establish the
Coverage A limit (or for the Other Structure the Coverage B limit). It can
be used with all forms except HO 04.
(I/II) This conveys
insurance protection to the named person but they do not become a full
“insured” under the policy. Full Section II coverage is granted. Coverage C
is provided for the named person both on and off the “residence premises.”
Usually this is used when other adults are members of the insured’s
household who do not qualify as spouse or family member.
(II) This provides
for Section II coverage for owned recreational vehicles off the “insured
location” if they were not built or modified to exceed 15 miles an hour, but
does not apply to motorized bicycles, mopeds, or golf carts.
(I/II) This unique
endorsement extends Personal Property and Liability coverage to a relative
of the “insured” who resides in a scheduled living care facility. Coverage
for property owned by the facility and rented or used by the named
individual is not covered. Policy deductible would apply to any loss. In
addition to the policy’s special limits, the endorsement applies the
following additional special limits: $250 for each hearing aid; $100 for
each pair of eye glasses; $100 for contact lenses; $500 for false teeth or
dentures; $500 for a medi-alert device; $250 for canes, walkers or other
walking aids; $500 for each wheelchair. Medical Payments is not included in
this coverage extension.
(II) This extends
Section II coverage arising out of the necessary or incidental use of a
premises used in business (office, private school, or studio) shown on the
(I) This is used to
provide specific, scheduled coverage for Jewelry, Furs, Cameras, Musical
Instruments, Silverware, Golfer’s Equipment, Fine Arts, Postage Stamps,
and/or Rare and Current Coins. All risk coverage is provided to scheduled
items (subject to endorsement exclusions) with losses on all types of
property valued on an agreed value basis. (See also
HO 23 03 - Scheduled
Personal Property Endorsement - Texas )
(II) This liability
endorsement expands Coverage E -Personal Liability to include injuries
arising from: false arrest, detention or imprisonment; malicious
prosecution; wrongful eviction, entry, or invasion; slander or libel;
violation of right of privacy.
(I) This is used to
set up selected limits to increase the sub-limits for Money; Securities;
Jewelry, Watches and Furs; Firearms; Silverware; and Electronic Apparatus.
When used to increase the theft limit on jewelry, watches and furs the
endorsement imposes a maximum value per item of $1,000.
endorsement extends Section II coverage arising out of the off the “insured
location” use of owned snowmobiles that have been described on the
endorsement allows the policy to respond to damage caused by constant or
repeated seepage or leakage of water or steam from within a plumbing,
heating, air conditioning, automatic fire protective sprinkler system, or
household appliance. This can be used on the HO 3 and HO 5 only.
endorsement expands the definition of “insured location” to include the
listed rented residences, thereby granting Section II protection.
(I) This sets up
15% of Coverage A (not an increase in the Coverage A limit) to be used to
pay for damage to foundations caused by seepage or leakage of water or steam
from within a plumbing, heating, air conditioning, or automatic fire
protective sprinkler system. This can be used on the HO 3 and HO 5 only.
(II) This amends
Section II coverage to provide liability protection for claims arising out
of business pursuits. This does not apply if the “business” is owned or
financially controlled by the “insured” or by a partnership of which the
“insured” is a partner or member.
(I) This sets up
$5,000 (not an increase in Coverage A limit), subject to a $250 deductible,
to be used to pay for damage caused by water or water borne material that
backs up through sewers or drains, or comes from sumps or sump pumps.
(II) This deletes
the described farming operations from the business exclusion in the
liability section of the policy. This endorsement may be used when farming
is conducted on the “residence premises” when farming is not the insured’s
primary source of income; when the “residence premises” is used for
sheltering and grazing animals; and, when the incidental farming activities
are away from the “residence premises” at a stated location.
endorsement deletes these perils from Section I.
substitutes the entire liability and medical payments section to include
provisions for farming operations at the described dwelling or elsewhere. It
also includes employer’s liability on farm employees as a coverage option.
This form contains a pollution liability exclusion except on a sudden and
(I) This is used on
the HO 2 only, to delete any replacement cost valuation from the Loss
Settlement clause for all covered property except for jewelry which receives
replacement cost without deduction for depreciation.
endorsement extends Section II coverage to accidents involving scheduled
endorsement sets up ‘all risks’ coverage for hardware, software, and other
electronic systems used with computers; however, policy deductible still
applies. This endorsement does not change the off premises limit and does
not eliminate the “business” personal property limitation. Exclusions
include, but are not limited to: damage caused by animals owned or kept by
an “insured”; damaged caused by vermin, birds, rodents; dampness of
atmosphere or extremes of temperature; and constant or repeated seepage or
leakage of water or steam. It can be used on all forms except HO 5, HO 4
when written with
HO 05 61, or HO 6
when written with
HO 17 90.
(II) If the insured
purchases employer’s liability under the
HO 24 73, this endorsement excludes
injuries to undocumented workers.
endorsement is for use with HO 5, HO 4 when written with
HO 05 61 or HO 06 when written with
HO 17 90. This accomplishes the same
increases as HO 04 65 with provisions that the theft limitations also apply
to loss caused by misplacing or losing the items.
endorsement deletes the statutory community property clause contained within
HO 01 42 - Special
Provisions - Texas endorsement.
(I) The terms of
this endorsement increase the basic limit of 10% contained within the form
to some other selected percentage amount.
additional coverage up to $15,000 for expenses incurred as a result of
endorsement sets up the structure of loss payments when more than one
insurance company provides coverage on the same “residence premises.”
| Technical Resources
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temporary user id / password protected web site. Please contact our
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secured three days limited access user id / password.
To Get More Details Regarding Coverage
Provided By Above Standardized Policy Forms
1 . Click Above Image
2. Open " Policy Coverage "
3. Scroll Down To " Homeowners
Policy " then click open any homeowners policy file you wish to review.
Other Residential Policies
- Renters: A landlord’s insurance does not cover a
renter’s personal property. Renters insurance covers your belongings,
provides liability protection, and pays additional living expenses if a
fire or other disaster forces you to move temporarily from your rented
- Condominiums: Condominium insurance matches the
benefits of renters insurance, and also covers damage to improvements,
additions, and alterations to the condominium unit.
- Townhouses: Townhouses may be insured by either an
individual homeowners policy or an association master policy. If a
townhouse is owner-occupied and the townhouse association does not have a
master policy on the building, you can purchase a homeowners policy on
your individual unit. If the association has a master policy, you should
get a Texas tenant homeowners policy to insure your personal property.
- Mobile homes: Mobile homes without wheels and resting
on blocks or a permanent foundation qualify for a homeowners policy.
However, most mobile homes are insured by a Mobil homeowners policy. A
Mobil-owners policy is actually an auto policy that covers mobile homes
used as residences. Mobil owners policies offer extremely limited
- Farm and Ranch owners: Farm and ranch owners policies
insure homes outside city limits on land used for farming and raising
livestock. You can pay extra and get coverage for certain farm equipment
Maintain Adequate Coverage
Buy enough coverage to avoid a major financial loss if your home is
severely damaged or destroyed. This means keeping a realistic dollar amount
of coverage on your house.
Replacement Cost Coverage of Your House
The standardized HO-B and HO-C policies provide replacement cost coverage
for your house, up to your policy’s dollar limits. Replacement cost is what
you would pay to rebuild or repair your home, based on current construction
costs. Replacement cost is different from market value and does not include
the value of your land. If you are not sure of the amount it would cost to
rebuild your home, your company or agent usually has construction cost
tables to help you determine the cost.
To receive full payment (minus your deductible) for a partial loss, such
as a hail-damaged roof, you must insure your house for at least 80 percent
of its replacement cost. If you insure your house for less than 80 percent
of the full replacement cost, the insurance company may only allow a actual
cash ( minus depreciation may apply ) settlement value ; instead of the full
current replacement cost you incur.
Unless you buy an endorsement increasing your coverage, HO-A policies
only provide actual cash value coverage. Actual cash value is the
replacement cost of your property minus depreciation. If your home is
destroyed and you only have actual cash value coverage, you may not be able
to completely rebuild.
If you have an HO-A amended policy or an approved alternative policy,
read your policy carefully to know whether it offers replacement cost
coverage or actual cash value coverage.
Your Policy’s Dollar Limits are Important
If you insure your house for $100,000, that’s the most you will get if
it’s destroyed, even if it would cost more to replace. The Declarations Page
on the front of your policy shows how much coverage you have. Talk with your
agent or company representative if you have any questions about your
Don't wait until you have a claim to learn your if policy’s limit is
provides adequately coverage property or liability coverage .
Coverage for Your Personal Property
HO-B policies automatically cover household contents – furniture,
clothes, appliances, etc. – up to 40 percent of the amount of your dwelling
coverage. This means if your house is insured for $100,000, its contents are
insured for up to $40,000. You can get more coverage by paying a higher
Personal property coverage pays only the actual cash value of damaged,
stolen, or destroyed household goods unless you buy replacement cost
coverage. Actual cash value is an item’s replacement cost, minus
Replacement cost coverage offers you more protection than actual cash
value coverage up to 40 percent of the amount of your dwelling coverage . If a burglar steals your six-year-old television set, for
example, and you only have actual cash value coverage, you get only what you
would expect to pay for a six-year-old television set. With replacement cost
coverage, the insurance company pays to replace your TV with a new set
similar to the stolen one.
Companies generally want you to prove that you replaced an item before
they’ll pay your claim in full.. However, if you have an HO-B policy, the
company must advance you the first $1,500, plus the depreciated value of any
other damaged property, without requiring proof of replacement. After that,
the company must pay you within five business days after receiving proof you
replaced, restored, or repaired the property. A company can offer to replace
the items instead of paying cash, but the choice is yours.
Take Inventory of Your Property
Many people learn after a fire or storm that they didn’t have enough
personal property coverage. Making an inventory will help you decide how
much insurance you need. It will also simplify claims.
Your inventory should list each item, its purchase date, value, and
serial number. Photograph or videotape each room, including closets, open
drawers, storage buildings, and garage. Keep the inventory and receipts for
major items in a fireproof place or another location.
Homeowners insurance on certain personal items like jewelry and furs is
limited. You may be able to buy more coverage for an extra premium.
Other Types of Insurance You Might Need
Texas ranks near the top of the nation in weather-related property damage
each year. A large portion of this damage is caused by flooding.
Most Homeowners policies do not cover flood damage. To protect yourself from
losses caused by most flooding, you can purchase a separate flood insurance
policy from the National Flood Insurance Program (NFIP)
administered by the Federal Emergency Management Agency. Local insurance
agents sell NFIP flood policies and can tell you about the program in your
area. For more information, call NFIP
If a lender determines that a property is in a special flood hazard area,
the borrower is required to purchase flood insurance. A special flood hazard
area has a 1 percent chance of being inundated by flood.
Hurricanes and Windstorm Insurance
The Texas Windstorm Insurance Association (TWIA) is the state’s
insurer of last resort for wind and hail coverage in the 14 coastal counties
and parts of Harris County on Galveston Bay. TWIA provides wind and hail
coverage when insurance companies exclude it from homeowners and other
property policies sold to coastal residents. You can buy TWIA coverage
through local insurance agents if you need it.
When a hurricane enters the Gulf of Mexico (80 degrees longitude and 20
degrees latitude), you can no longer change or purchase new windstorm
If you plan to build, add to, or renovate a home or other structure and
want TWIA coverage, you or your builder should request an inspection by a
TDI windstorm inspector or a Texas licensed professional engineer appointed
by TDI. Your agent can tell you how to get an inspection. For more
information about windstorm coverage, contact TWIA
If you are concerned about earthquakes, you can get coverage with a
separate policy. The cost is relatively low because earthquakes are rare in
Extra Coverage (Endorsements)
You might want more coverage than your policy provides for certain items.
For an extra premium, you may be able to buy endorsements that expand or
increase the coverage on these items. Some of the most common endorsements
expand or increase coverage for jewelry, fine arts, camera equipment, coin
or stamp collections, computer equipment, and radio and television satellite
dishes and antennas.
Personal Umbrella Liability Insurance
If you have assets to protect and want more liability coverage than a
homeowners policy provides, you can buy a separate umbrella policy. Because
policies vary, make sure the agent or company fully explains the coverage.
Shopping for Homeowners Insurance
Rates vary widely among companies, so it pays to shop around. Following
are some useful tips to help you find the best deal for your money:
- Decide before shopping the specific coverages and coverage amounts you
- Choose the highest deductible you can afford. Your deductible is the
amount you must pay yourself before the insurance company will pay. Higher
deductibles will lower your premium, but remember that you’ll have to pay
more out of your own pocket if you have a claim.
- Because rates vary, ask several companies and agents for price quotes.
When comparing rates, make sure they are for the same coverages. TDI
publishes a homeowners rate guide that can help you shop. The rate guide
lists companies and their annual premiums for policies with $100,000
coverage on the house, $40,000 on its contents, and a 1 percent ($1,000)
- Ask your agent whether you qualify for discounts.
- When getting a price quote or applying for insurance, answer questions
truthfully. Wrong information could cause you to get an incorrect price
quote or could lead to a denial or cancellation of coverage.
- Consider factors other than price, including a company’s financial
rating, complaint index, and license status. The financial rating
indicates a company’s financial strength and stability, and the complaint
index is an indication of its customer service record. Buy only from
licensed companies and agents. It is against the law to sell insurance
without a license in Texas.
- Learn more about a company, including its licenses status, complaint
history, and financial rating from an independent rating organization by a
calling TDI’s Consumer Help Line or by visiting the TDI website
463-6515 in Austin
Texas law requires rates for insurance offered in Texas to be reasonable,
adequate, not excessive to the risks for which they apply, and not unfairly
All homeowners companies must file their rates for prior approval with
TDI. The rate-filing process is complex, but in general, TDI reviews each
company’s filed rates and underwriting guidelines and determines whether the
rates and guidelines are appropriate. Companies may appeal adverse rate
decisions in an administrative hearing and then in district court. If a
company appeals a TDI rate decision, it may implement its filed rates
pending the outcome of the appeal. If the appeal determines that the rates
were indeed excessive, the company will be ordered to pay refunds, plus
interest, to the policyholders it overcharged.
Residential property rates utilize a system called “file and use.” Under
this system, companies file their rates with TDI, but they do not need prior
approval to implement new rates. If TDI determines that a company’s rates
are excessive, the company can be ordered to pay refunds to the
policyholders it overcharged. Companies can appeal adverse rate decisions.
A company can change your individual premium only at your policy renewal
Factors that Affect Your Premium
Companies may use a number of criteria to establish your individual
premium. These include:
- Age and condition of your home. Older homes and homes
in poor condition are generally more expensive to insure. Companies may
refuse to insure homes in poor condition, but they can’t deny coverage
solely because of a home’s age or value.
- Your home’s replacement cost. Since your policy will
pay to rebuild your home if it is destroyed by a covered loss, premiums
are more expensive for homes with a high replacement cost.
- Construction materials used in your home. Homes built
primarily of brick are less expensive to insure than frame homes.
- Where you live. Premiums will likely be higher for
homes in areas with a high frequency of storms, such as tornados or
hailstorms, or with a high incidence of theft.
- Availability of local fire protection. Homes with
access to good fire protection services get better rates. If you live in
an area with limited fire protection, your rates will be higher.
- Your claims history. Companies will charge more if
you’ve filed claims in the past. Before filing a claim, it’s a good idea
to ask your agent or the company’s underwriting department how it will
affect your premium at renewal time. For less expensive losses, it may be
cheaper in the long run to pay for repairs yourself rather than file a
claim. This is especially true for repairs that wouldn’t cost much more
than the amount of your deductible.
- Your credit score. Companies may consider your credit
score and request an applicants social security number when deciding
whether to sell you a policy and what to charge you. However, a company
cannot refuse to sell you a policy or cancel or non-renew your policy
solely on the basis of your credit.
Having Trouble Insuring Your Home?
If you are having difficulty finding a homeowners policy, it may be
helpful to take steps to reduce your chances for a loss. Here are some
things you can do:
Remove Potential Risks
You can make your home more insurable by changing things that insurance
companies and agents interpret as signs of potential risk. Look around your
home for problems that could cause damage or injury, such as a heavy tree
limb hanging over your roof, loose porch railings, or cracks in your
Watch Out for Crime
Since theft is a common cause of homeowners claims, some insurers may not
be willing to insure homes that seem vulnerable to crime. While you cannot
stop crime by yourself, you can take a few steps to make yourself less
vulnerable. These precautions could also lower your insurance premiums.
- Call the crime prevention officers of your local police force. They
can inspect your home and give you specific advice on protecting it.
- Install dead bolts or other security devices on doors and windows.
- Work with your neighbors to start a Neighborhood Watch Program. Your
local police department has helpful information.
- Install a burglar alarm that alerts the police or a security company.
- Keep trees and shrubs trimmed, especially around windows and
entryways. Overgrown shrubbery can provide hiding places for would-be
burglars. Avoid parking cars on the street. Cars parked on the street are
tempting targets for thieves and vandals and, like overgrown shrubs, can
provide handy hiding places.
- Keep the area around your home well-lit.
- Permanently mark personal property with an identifying number to aid
in identification if stolen items are recovered.
Maintain Your House and Yard
Your home’s appearance is important when you’re looking for insurance.
Since companies want to avoid losses from injuries or accidents, agents look
for signs of poor maintenance. Agents might assume that a cluttered yard and
faded paint suggest an unsafe home. The outside of your home will be
inspected when you apply for insurance, often when you are not at home.
Insurance companies have the right to cancel a policy within the first 60
days, and some may reject new customers because an inspection revealed a
home in need of repair.
- Fix any obvious signs of damage, such as rotting boards, sagging
screens, or a loose front door.
- Remove anything from your property that could easily cause an
- Replace a damaged or badly worn roof. Water stains on a ceiling tell
an agent inspecting the inside of your home that you might have a future
claim for water-damaged property.
- Keep your yard clean and trim.
- If your paint is peeling or faded, consider repainting.
Other Options for Insuring Your Home
Texans having trouble finding homeowners insurance from licensed
companies may have other options for coverage. The following programs may be
able to help:
Texas FAIR Plan Association
The Texas FAIR Plan Association provides the standard Texas HO-A
homeowners insurance policy form to qualified consumers. To be eligible for
coverage, a consumer must have been denied insurance by at least two
licensed insurance companies writing residential property insurance in Texas
and may not have received a valid offer of comparable insurance from a
company licensed in Texas. For more information, call TDI or contact the
Texas FAIR Plan Association
If you’re still unable to find insurance, your last resort might be to
obtain insurance from a surplus lines carrier. Surplus lines carriers are
out-of-state companies not licensed in Texas, but legally eligible to sell
insurance on risks that licensed companies won’t cover. Surplus lines
carriers generally charge more than licensed companies and offer less
coverage. Surplus lines carriers are not members of a guaranty association.
This means that your claims might go unpaid if the surplus lines carrier
becomes unable to pay its claims.
Before you buy from a surplus lines carrier, make sure there are no other
options. Agents must make a “diligent effort” to find coverage with a
licensed company before offering you a surplus lines policy. Ask which
licensed companies turned you down, and why. Companies must justify
Losing Your Insurance
Knowing your rights can help if you are rejected for homeowners insurance
or lose your coverage. If you request it, a company must explain in writing
its reason for declining, canceling, or not renewing your policy. Texas law
prohibits companies from denying, canceling, or refusing to renew a policy
solely on the basis of your credit. You may file a complaint with TDI if you
believe a company improperly denied you insurance.
Many companies use the Comprehensive Loss Underwriting Exchange (CLUE) to
review an applicant’s claims history. CLUE lists the property insurance
claims history of houses – regardless of ownership – and individuals for the
preceding three years.
Federal law gives you the right to challenge wrong information. If an
insurance company based part of its decision to deny you coverage on a CLUE
report, you can get a free copy of the report by calling the ChoicePoint
Consumer Center or visiting its website
Before calling, get the CLUE reference number from the company’s denial
letter or from the company. Using the reference number will speed the
process by making sure you are requesting the right report.
CLUE is a registered trademark of Equifax Inc.
Cancellation and Nonrenewal
Cancellation means either you or the insurance company stops coverage
before your policy’s normal expiration date. If either you or the
company cancels your policy, the company must refund any premiums paid in
advance that did not buy coverage. This amount is called the “unearned
premium.” For example, if you paid an annual premium of $600 and you cancel
your policy after one month, the company owes you $550 in unearned premium.
Nonrenewal means a company refuses to renew your policy when it expires.
A company must give you written notice at least 30 days before your policy’s
expiration date. If the company does not notify you in writing in the
required time, it must renew the policy at your request.
Note: A company cannot non-renew or raise your premium
because of a claim you filed that was not paid or was not payable under your
Cancellation and Nonrenewal Summary for Residential Policies
Notice Required from Company: 10 days (30 days’ notice is required if the
policy is canceled within the first 60 days)
A company may cancel your policy within the first 60 days only if it
identifies an undisclosed additional risk of loss that is not the subject of
a prior claim.
A company may not cancel your policy after 60 days, except for fraud,
increased risk, or nonpayment of premium.
Notice required from Company: 30 days
A company may non-renew your policy for deterioration of your property or
if you file three or more non-weather related claims in three years.
- If the company fails to notify you after a second non-weather related
claim, it cannot refuse to renew your policy because of a third claim.
- A company cannot use the first two appliance-related claims to
determine the number of non-weather related claims for the purposes of
non-renewing your policy.
- Instead of nonrenewal, the company can charge an added premium called
a surcharge. A company can add a surcharge for filing two or more
non-weather related claims in the previous policy year.
- A company may require you to make repairs to your home before renewing
your policy. Generally, companies will give you six months to a year to
make repairs. If the repairs are needed because of a storm or other
covered loss, the company must pay for the work (minus your deductible).
If the repairs are required because of deterioration or normal wear and
tear – a worn-out roof, for instance – you are responsible for paying for
A company may not non-renew your policy for weather-related claims or for
claims that were not paid or not payable under your policy.
Keep in mind that if you move out of your house and it remains vacant for
60 days or longer, most policies automatically suspend coverage for damages.
The policy’s liability coverages will continue, however. The vacancy also
could cause the company to refuse to renew the policy when it expires.
Your Rights Against Unfair Discrimination
An insurance company cannot deny, refuse to renew, limit, or charge more
for coverage because of your race, color, religion, or national origin.
A company also cannot deny, refuse to renew, limit, or charge more for
coverage because of your age, gender, marital status, geographic location,
disability or partial disability, unless the refusal, limitation, or higher
rate is “based on sound underwriting or actuarial principles.” Sound
underwriting or actuarial principles means the company would have to show
valid statistical evidence that your home presents a greater risk for a loss
than other homes it is willing to insure.
A company cannot unfairly discriminate between individuals of the same
rate class and with essentially the same risk in its rates, policy terms,
and benefits, or in any other manner unless the refusal, limitation, or
higher rate is “based on sound actuarial principles.
In addition, a company cannot refuse to insure a home based solely on its
age or low value. Companies can offer discounts for newer homes and require
updates to the wiring, plumbing, and heating systems before agreeing to
insure an older home.
If You Have a Claim
If you have a claim, the company must start investigating your claim
within 15 days after receiving written notice. However, the company may ask
you for more information. Once you send the information, the company has 15
business days to accept or reject your claim. If the company agrees to pay,
it must do so within five business days. If the company rejects your claim,
it must explain its reasons in writing.
- A company that needs more time can take 45 days to make a decision if
it sends you a notice explaining the delay.
- A company that suspects arson has 30 days after receiving the required
paperwork to either accept or reject a claim.
- TDI can give companies an extra 15 days after a major natural
- Surplus lines carriers have 20 days to pay your claim after agreeing
to do so.
A company that takes too long to pay is liable for your reasonable
attorney fees plus damages equal to 18 percent of your claim if you sue and
win. In an insurance claim lawsuit, the insurance company has the burden of
proving it was not obligated to pay.
If you are financing your home, your insurance company may require your
lender to sign or approve your claim check. When this happens, the lender
must act within 10 business days after receiving the request. Failure to act
within this time period could result in a $500 civil penalty. Complaints
about lenders failing to process claim payments should be directed to the
Texas Attorney General’s Office
To make the claim process run smoothly and to protect your rights, follow
- Know your coverage. Your policy’s dollar limits and benefits appear on
your policy’s Declarations page. If you need help, ask your agent or
- If you have a loss, notify your agent or insurance company
immediately. Report losses involving theft or crime to the police.
- Make a list of your damaged property. If possible, photograph or
videotape the damage before making any repairs.
- Make only temporary repairs to protect your house and belongings. The
insurance company may deny your claim if you make permanent repairs before
it inspects the damage. If you are not sure whether a repair is considered
permanent, contact the insurance company before beginning repairs. The
cost of these repairs and for storing personal belongings is covered by
your policy. It is important to make only temporary repairs.
- Keep receipts. For personal property claims, you must provide evidence
that you bought the replacement items. If you bought materials for
temporary repairs, receipts will help you get reimbursed quickly.
- Try to be there when the insurance company’s adjuster inspects your
home. You may have your contractor or builder with you. Your contractor or
builder may discuss estimates or technical specifications with the
adjuster or your insurance company.
- If you have to move because of a disaster, make sure your address is
visible. Leave a sign with your temporary address, phone number, and the
name of your insurance company.
Proof of loss. Within 15 days after you report your
loss, the company may request a signed, notarized proof-of-loss form. In
most cases, the company will ask you to estimate the replacement cost of the
household items you lost and the cost of repairing your home. Contractors,
catalogs, and retailers are good sources of current price information.
- Include sales tax in your cost estimates.
- Ask whether you should use exact costs, or if you can round numbers to
the nearest dollar.
- Don’t forget to include small items such as kitchen utensils or
- The company will use the form to decide the value of your claim, so
make your list as complete and as detailed as possible. Include photos and
receipts. Be sure to keep copies for your records.
Final estimate. The adjuster will prepare an estimate of
the cost to repair or replace your home and any personal belongings. The
insurance company’s offer is based on this estimate.
Disputes. If you disagree with the adjuster’s estimate,
tell the company why. The company may have overlooked something and may make
adjustments. If you still disagree, you can use a process called appraisal.
The appraisal process governs only disputes over the amount to be paid.
It is not for settling disputes about coverage or the cause of a loss.
You and the company each hire an appraiser. The two appraisers then
choose a third one as umpire. Your appraiser and the company’s appraiser
make their own estimates of your loss. If they differ, the umpire makes the
final decision, which is binding on both you and the company. You are
responsible for the expenses of your appraiser and for half of the umpire’s
Public insurance adjusters. Public insurance adjusters
charge fees to help negotiate claim settlements with insurance companies. If
you hire a public adjuster, you may have less money to repair or replace
The public adjuster’s fee may be a flat fee, an hourly rate, or a
percentage of the amount paid in the settlement of the claim. The method for
calculating the commission must be included in the public adjuster’s
contract with you, along with a statement that the adjuster’s commission may
not exceed 10 percent of the entire claim. In some instances, a public
adjuster is entitled only to reasonable compensation for time and expenses.
Public adjusters may not give legal advice and may not participate,
either directly or indirectly, in the reconstruction or repair of your
damaged property. They are also prohibited from engaging in any activity
that would be a conflict of interest. Should you choose to hire a public
adjuster, make sure the public adjuster is licensed by TDI. To learn whether
a public adjuster is licensed, call TDI’s Consumer Help Line or use the
“Insurer Search” feature on TDI’s website.
Payment. Once the company agrees to pay all or part of
your claim, it must do so within five business days. If you don’t get your
check within five days, contact your agent or company. If you believe that
the company is delaying payment intentionally, contact TDI for help.
Note: Most companies pay homeowners claims with two
checks. The first, issued after the adjuster reviews your loss, is for the
estimated cost of repairs, minus depreciation and your deductible. The
company issues the second check for the balance of your claim after
receiving the contractor’s bill for the finished job, as long as the repairs
or replacements are completed within 365 days of the date of loss. You may
submit a written request for an additional 180 days extension.
Getting Help from TDI
Companies are subject to penalties if they fail to settle claims promptly
and fairly. If you believe an insurance company has treated you unfairly,
first contact your company and try to resolve the problem. Most companies
operating in Texas are required to have a toll-free telephone line to
provide customer assistance. The number should be listed in your policy. If
you are unable to resolve the problem yourself, contact TDI to file a
You may file an insurance-related complaint with TDI several ways:
For More Information or Assistance
For answers to general insurance questions or for information on filing
an insurance-related complaint, visit our website or call the
Consumer Help Line between 8 a.m. and 5 p.m., Central time,
463-6515 in Austin
For printed copies of consumer publications, call the 24-hour
Publications Order Line
305-7211 in Austin
Help us prevent insurance fraud. To report suspected fraud, call our
toll-free Fraud Hot Line
To report suspected arson or suspicious activity involving fires, call
the State Fire Marshal’s 24-hour Arson Hot Line