Homeowners Insurance in the Lone Star State

Insurance is a way to shift risk from you to someone else, normally an insurance company. There are different kinds of risks, and thus different kinds of insurance. Some companies sell wedding insurance that only kicks in if the bride or groom leaves their would-be spouse standing, alone, at the altar.

There is special insurance for self-driving cars, and luxury boats, and satellite launches. All of these activities involve some degree of risk, and so all of them are good candidates for risk redistribution.

But as odd or obvious as those examples might be, one of the most common types of policies is homeowners insurance. Owning a home might not immediately scream “risky behavior” to you, but once you give it some consideration the risks become apparent.

A house is very often a hefty investment, sometimes the biggest investment a person will make in their lifetime. And—as we have certainly seen in the State of Texas as of late—owning a home can actually be quite risky.

But what does homeowners insurance normally cover?

According to the Texas Department of Insurance, most homeowners insurance policies issued in Texas generally include coverage for damage to, or destruction of, the building itself, coverage for the value of items inside the house that may be damaged, destroyed, or stolen, and coverage for the loss of use (normally in the form of a rental reimbursement, i.e. your house was destroyed so we’ll pay for your hotel room).

Homeowners insurance policies issued in Texas also generally include coverage for personal liability, meaning when someone is injured on your property and they sue you—the policy will cover your liability up to a certain amount.

There are two general categories of homeowners insurance policies common in Texas.

The first is called an “all-risk policy.” It, like the examples given above, normally covers any kind of damage done to your home.

The second most common homeowners insurance policy found in Texas is called a “named perils policy.” This covers only the exact circumstances referenced explicitly in the policy itself. While this type of policy offers less coverage, it is often much cheaper and can be tailored to the specific concerns of the policy holder.

Texas homeowners beware, though, many homeowners insurance policies do not cover things like natural disasters, frozen pipes, insect infestations, and the like. You’ll have to get separate policies (or policy endorsements) that cover these risks specifically, but most companies that offer homeowners insurance also offer many of these other types of insurance too.

If you’re in Texas and you intend on getting a homeowners insurance policy, it might also be a good idea to preemptively inspect your house and repair any damage to it that might make it riskier than necessary for your would-be insurer.

Fixing leaky ceilings, dry rot, and ensuring the building is up to code in terms of plumbing work and electrical wiring are all ways to make your home more insurable, and less expensive to insure.

Ultimately the world can be a pretty dangerous place, but you shouldn’t have to worry about that tucked away in your living room. Homeowners insurance is not only a good way to get rid of risk, it’s also a good way to get rid of worry.