If you're a Texan, it's important to have homeowners insurance.
As the last decade showed, Texas saw its share of hurricanes and other natural disasters.
If something happens to your home in the Lone Star state, you want to have proper insurance to get your home and life back to "normal" ASAP.
Let's take a look at the major different types of Texas home insurance policies available, as well as what each one covers.
We'll also talk about how to choose the right policy for your needs.
Texas Homeowners Insurance Policies
There are three main types of Texas home insurance policies: HO-1, HO-2, and HO-3.
HO-1 Policy a.k.a. "Basic Form"
HO-1 policies are the most basic and usually cover damage from fire, smoke, and lightning in addition to other named perils, or risk-related situations that your policy specifically mentions, for instance:
- Aircraft accidents affecting your home
- Explosions
- Fire and/or Lightning
- Hail and Windstorms
- Smoke damage
- Theft
- Vehicle Accidents affecting your home
- Vandalism
However, An HO-1 policy does not provide protection from water damage (sudden or accidental), e.g., a broken faucet or dishwater spewing water.
There are other disasters, of course, that an HO-1 policy won't cover.
Here in Texas, both along the Gulf of Mexico and further inland, many live in an area prone to hurricanes or other natural disasters.
In this case, securing an HO-2 or HO-3 policy proves a good idea to provide more comprehensive coverage.
HO-2 Policy a.k.a. "Broad Form"
HO-2 policies cover the same things as HO-1 policies with a bit more protection in turn.
This is the most popular type of home insurance in Texas since it covers the majority of possible damages that could occur, including coverage for damage from:
- Falling Objects
- Snow, Sleet, Ice Weight
- Frozen Pipes
- Accidental or Sudden Water Discharge
With the "Snowmageddon" issues Texas faced in 2021, all four of the above proved real possibilities all at once!
You can consider both the HO-1 and HO-2 as named perils policies, since the perils the cover against are specified.
HO-3 Policy a.k.a. "Special Form"
Consider HO-3 policies as "open peril". These policies provide the most comprehensive coverage, including everything that HO-1 and HO-2 policies cover, plus water damage.
Living near Texas gulf waters, rivers, lakes, or ponds that could flood, this is the policy you'll want.
Now that you have familiarity with the different types of Texas home insurance policies available, how do you choose the right one for your needs?
The first step is to assess your risk. If you live in an area prone to hurricanes, you'll want an HO-2 or HO-3 policy. If you live in an area prone to flooding, you'll want an HO-3 policy.
Exclusions do exist, though. An H0-3 policy does not usually protect from:
- Acts of War
- Backup from Sewer
- Earthquakes
- Floods
- Termites and other wood-destroying insects
- Vermin
This list does not provide a complete listing, but the above are common exclusions.
Once you've assessed your risk, you can make sure to get quotes for all the different types of policies so you can compare them side-by-side.
Finally, make sure to read the fine print before contracting a policy.
You want to make sure you understand what is and isn't covered.
If you have any questions, don't hesitate to ask Insurance For Texans. We welcome those conversations!
As an independent insurance agency, we have access to many different options, so when you're ready to choose the right policy for your needs, give us a shout.
We know Texas. We know insurance. We are homeowners in Texas, ourselves.
Keep it true, Texas.
Ron Wadley is an owner and General Solver of Problems for Insurance For Texans. Ron is a resident of North-East Tarrant County in the Dallas-Ft Worth area. He loves riding his many bikes and watching his Baylor Bears play football and basketball. Send him your insurance questions at ron@insurancefortexans.com.