Best Homeowners Insurance in Texas

Best Homeowners Insurance in Texas

A kitchen fire, a flooded basement, a tree through the roof: when disaster strikes, it can be financially devastating to a homeowner. 

If you have a mortgage, chances are you already have a homeowners insurance policy, as most lenders require it. For owners (or soon-to-be ones) it seems like a no-brainer. But the key is making sure you have adequate coverage to take care of any sudden calamities. 

Homeowners insurance becomes particularly vital when the home is located in an area prone to natural disasters. Because Texas has four distinct, major geographical regions, a one-size-fits-all approach to purchasing home insurance is uniquely impractical – and unwise. In this instance, the region makes a difference: Hurricanes, floods, hail storms, and tornadoes are all specific perils that can affect Texans depending on where they reside. 

But, not all insurance policies can or will cover the damage caused by these natural phenomena, especially basic plans. It might be tempting to cut corners on cost, especially when you factor in that Texas is the seventh most expensive state in the country for homeowners insurance. So, it’s important to be armed with the facts before choosing a plan. 

First, let’s identify homeowners insurance basics, what coverage consists of, and what protection it provides.

WHAT ARE THE BASIC TYPES OF HOMEOWNERS INSURANCE?

There are eight types of homeowners insurance. These are:

• HO1 – The simplest type, also known as the basic form, is a named peril policy that’s limited in its coverage. Named peril policies tend to only cover specific perils (think: fire, aircraft, riot, explosion, smoke, theft, or lightning) which means it’s usually cheaper than an all-risk or open peril policy.
• HO2 – Similar to the HO1, this broad form policy includes additional perils covered in the HO1 policy such as falling objects or issues from freezing. Sometimes, this can also include personal property or liability coverage. It’s generally considered a mid-range policy.
• HO3 – In contrast to the named peril policies (HO1 and HO2), this special form policy is categorized as open peril, meaning that it will cover dwelling damage from everything not specifically excluded in writing. However, personal property is still covered on a named peril basis.
• HO5 – Although very similar to HO3 policies, these comprehensive form policies have noted differences that make them more expensive. For example, both dwelling and personal property are covered as open peril policies.
• HO8 – Specifically tailored for older homes, HO8 are basic form, named peril policies that might not require the usual four-point inspections.

If you’re a renter, you can choose a renters policy (HO4). Condo or co-op owners have the option of a condo policy (HO6). If you own a certain type of mobile home, you can take out a mobile home policy (HO7).

WHAT DOES HOMEOWNERS INSURANCE COVER?

A good policy should cover both the structure of the property and the possessions within, as well as any additional buildings attached to it such as garages or sheds. It should also include liability coverage and medical payments against accidents either in the home or on the rest of the property.

In general terms, most policies, no matter the type, will cover the following situations:

• Fire
• Lightning
• Sudden and accidental smoke damage
• Explosion
• Theft
• Vandalism
• Riot
• Aircraft or vehicle damage
• Sudden and accidental water damage

As mentioned in the previous section, there are two types of home insurance policies: open peril, which covers virtually everything unless specifically excluded; and named perils policies, that offer much narrower protections. Knowing the type of coverage you have on your home will inform you of the perils that are covered.

However, extreme natural phenomena such as earthquakes, hurricanes, mudslides, floods, and hail storms are not usually covered under standard policies unless a specific rider, or add-on, was purchased for it.

WHAT MAKES TEXAS HOMEOWNERS INSURANCE UNIQUE?

Due to the unique geographical layout of the state, homeowners in Texas can encounter anything from hurricanes on the coast, tornadoes on the plains, and hailstorms everywhere in between. As such, a good Texas home insurance policy ought to be able to cover everything from simple damage to major destruction. 

Windstorm, hurricane, and hail are generally excluded if you live on the coast; and flooding and earthquakes are generally available only on an optional basis as add-ons to your basic policy.

Texas consistently hits the top rankings for the highest premiums in the country, partly due to the prevalence of catastrophic weather losses, but also because of higher insurance expenses, increased target profit margins, and increasing reinsurance costs.

WHAT FACTORS CAN AFFECT HOMEOWNERS INSURANCE PREMIUMS IN TEXAS?

Aside from the above mentioned geographical and peril-related considerations, there are a whole host of factors that influence homeowners insurance rates in Texas, such as:

• Age of the home
• Construction materials used
• The home’s replacement cost
• The owner’s marital status
• Credit history and score
• The home’s principal use
• The city’s population density and real estate market
• Proximity to emergency services, such as police and fire stations

It’s important to know that insurers value and rate factors differently, so requesting quotes from as many companies as possible and comparing prices will provide a clearer picture of the available options and the range of deductibles. 

Before deciding on a homeowners insurance provider, it’s essential to shop around, ask questions, research the companies’ customer satisfaction, and understand all the nuances that go into policies and coverage. By familiarizing yourself with the types of perils covered and the exclusions, you won’t be caught off guard and unprotected if something happens.

TOP 4 TEXAS HOMEOWNERS INSURANCE

Allstate

Allstate specializes in offering flexible options for homeowners insurance coverage in which you choose the limits, deductibles, and types of coverage. Basic plans cover the dwelling itself, other additional structures on the property, personal possessions, liability protection, and guest medical protection. Other protections that can be added are water backup, sports equipment, reimbursement for green equipment, and electronic data recovery. Coverage for earthquakes and other natural disasters, though not included automatically, can be added as additional riders.

Progressive

Progressive's home insurance policies protect the dwelling itself, personal property therein, liability protection, medical payments, and also the loss of use if the damage is so severe that it's impossible to inhabit the home while repairs are being done. Their standard plans don't feature hazards or natural disasters, but separate riders can be purchased for said risks – a good option when living in Texas. Other add-ons include guaranteed replacement cost, inflation guard endorsement, increased limits on money and securities, theft and forgery, and finally, watercraft and secondary residence endorsement.

Esurance

Esurance affirms that looking for a home insurance policy for homeowners or renters in Texas is simple and efficient. Once you've input your information on their page, a free quote is available within minutes. They not only provide discounts for hail-resistant roofs, storm shutters, and making your payments on time, but their claims are also easy to file with their dedicated claims representatives. Coverage for natural disasters varies according to the policy you choose, but they can cover virtually anything, as well as riots, falling objects, and frozen plumbing, heating, air conditioning or other household systems. Basic plans don't cover flood or earthquake damage, and can also exclude, water damage, mold, fungus, vermin, deterioration, and wear and tear.

Liberty Mutual

Since 1923, Liberty Mutual home insurance has tailored its policies to the unique needs of Texan homeowners and renters. Liberty Mutual focuses on rewarding responsible choices by providing discounts and exclusive savings for members of over 1,000 college alumni groups, employers, and associations across the state. Additionally, if you choose to also insure your car with your home, you may qualify for a multi-policy discount.

Nationwide

With insurance agents located across the Lone Star State, Nationwide offers a host of basic coverage options such as dwelling, contents, personal liability, medical payments to others, other structures, and loss of use. Among its varied optional coverage choices, “Better Roof Replacement” provides for rebuilding your roof stronger than ever in case of a covered loss. No matter if you live in Houston, El Paso, Laredo, Dallas, or any city in-between, Nationwide’s free On Your Side Review helps customers assess their current policies and decide what changes should be made to better fit their budgets and needs. You can also save big if you opt to bundle your homeowner's insurance with auto, personal liability, or pet insurance offered by Nationwide.