Many Texans are constantly looking for a way to trim their personal finances. As property taxes have soared, they have looked at their home insurance as a means to find some savings to offset those increases. But is it worth trying to save a few bucks to have a cheap Texas home insurance policy?
Here are three reasons why we see people regret buying cheap home insurance
1. Lack Of Water Coverage
Everyone knows about the number of hail claims on roofs in Texas. You basically have to live inside a cave to not realize that hail falls from the sky frequently. But what Texas homeowners may not realize is that water claims are plentiful as well and can actually cost significantly more than a roof replacement. We have seen hot water heaters in attics give way and flood homes with thousands of gallons of water. When this occurs, the claim can easily exceed $50,000 in total damage and remediation.
Why do we bring this up? Because there are Texas Home Insurance policies sold daily to our neighbors either do not cover water damage or cover it on a very limited basis. That means that you could be sitting on a ticking time bomb if you don't understand how water damage is handled on your home insurance policy. Make sure that you understand if you have coverage for sudden & accidental, foundation leaks, seepage & leakage, or even a back up of your sewer line. Along with those line item types of coverage, you want to understand the sub-limit on each if there is one. There is a huge difference between $10,000 and $200,000 of coverage for a large water claim event from a dishwasher. Many agents will lower these sub-limits to help make your premium cheaper.
2. How Long Does It Take To Get A Claim Taken Care Of?
We've helped plenty of Texans with their claims through the years. We have seen them handled well and not so well. Our goal is that when it comes time to use your insurance that you can have your personal situation wrapped up as quickly as possible. There are things that occur in that process that can be out of the control of all of us. Delays happen. However, one of the things that we have observed with certain Texas home insurance companies is that they are always slow to settle claims. They love to nit pick what has occurred. They try to limit what they will pay as much as possible. Experience says that you are much more likely to have this occur when you buy cheap home insurance. It is important to save money. We try to do the same thing. But some things are just more important than $10 or $15 a month.
3. Actual Cash Value On The Roof
One of the biggest drivers of price on a Texas Home Insurance policy is the wind and hail coverage. Many people focus on keeping their wind and hail deductible low so that they can manage a roof replacement with as little out of pocket expense as possible. Which is a great thing. However, keeping that deductible low but having your roof claim settled as actual cash value rather than replacement cost can end up costing you thousands of dollars.
When a roof ages, the value of the roof declines. Just like a car. When a policy is set up to pay your claim as actual cash value, the depreciation factor is figured into the amount of money that you receive when the claim is settled. That means when hail destroys your ten year old roof, you claim will likely be settled at less than 50 cents on the dollar. Are you ready to pay for half of your roof replacement?
What Can I Do To Make Sure My Home Insurance Is Rock Solid?
We have put together five questions to ask before buying a home insurance policy to help you make sure that you aren't being taken in the name of a good deal. Always work with a local independent insurance agent who assumes the role of fiduciary on your behalf. That way your best interests will be put at the forefront of the conversation, while also making sure that the cost is as reasonable as possible. No one wants to pay too much, but it really is more important to make sure that you have great protection when you need it.
