As the average costs of basically everything have continued to skyrocket, the cost of homeowners insurance is no exception. The average rates in Texas have far eclipsed the national average unfortunately. And if you live in either North Texas or within spitting distance of the Gulf Coast, your home insurance premiums have basically become impossible to keep up with. Many Texans feel like they need a second mortgage just to keep up with their skyrocketing annual cost.
As a result, Insurance For Texans has been getting a whole lot of calls here at our World Headquarters lately about the rate chaos that is hammering the great folks of Texas. While we've spoken with many of you about trying to find some price relief from the insurance providers, we've noticed that many are grappling with the same challenge: deciphering and comparing home insurance proposals. In our great state, particularly in North Texas, this task has become as complex as a chili recipe. So, let's walk you through some essential tips to consider when examining home insurance options, ensuring you're as well-protected as a prized longhorn in a thunderstorm.
Five Key Areas Where Texans Can Get Screwed By Standard Home Insurance Policies
If you have owned a home for any length of time, you've probably come to realize that not all insurance coverages are the same. It seems like insurance providers are making it impossible to compare one policy against another. So here are the five key types of coverage on a policy that you need to make sure that you have even if that other quote from the guy down the street has a lower cost. Without these five coverage types, you may find yourself holding a giant bag of cow manure in the event of a claim.
1. Roof Replacement Cost Coverage
The first thing to scrutinize in your policy is whether it offers replacement cost coverage for your roof in the event of wind or hail damage. Many policies use the term 'roof payment schedule' to keep Texans from understanding that they are essentially providing you with the actual cash value, not the full replacement cost. This distinction is vital because, let's face it, our Texas weather isn't always as friendly as our people. When hail the size of pecans comes calling, you want to be sure your policy fully covers your roof’s replacement and not just 50% of it.
2. Lowest Deductibles Manageable
Did you know that Texas homeowners insurance policies generally have two types of deductibles: one for wind and hail, and another for everything else? That everything is called "All Other Perils" and it's critical to examine these closely. Some agents might set the 'all other perils' deductible higher, increasing your financial responsibility in events other than wind and hail. This tactic might offer short-term savings but could lead to substantial costs later. Imagine facing a water damage incident and finding out your deductible is double what you expected – that’s a situation you want to avoid.
3. Water Damage Coverage Nuances
After hail, water related claims are the second most frequent type of claim in Texas. Unfortunately, water-related damages are a complex area in homeowners policies. Because not all water claims are the same, you need to pay extra attention to which water coverage types that you have on your policy. Here are the three that we deem to be the vitally important if you want to have comprehensive water coverage on your homeowners insurance.
- Limits on Sudden and Accidental Coverage: Every policy comes with sudden and accidental water coverage. This is the leak that happens when your pipe bursts or your hot water heater explodes and floods your house. But did you realize that some of the cheapest home insurance companies limit how much they will cover you for water damage? Sounds shady right? Ensure this coverage isn’t limited to an amount less than your home’s full value.
- Water Backup Coverage: OK. This type of water coverage can be kind of gross. If your sewer line outside your foundation backs up into your bathroom, do you want to clean it up? Without this endorsement on your homeowners policy, you may be left with the poop. Don't get caught with a bigger mess than you can reasonably handle.
- Slow Leak Coverage (Leakage): Here is one of our favorite ways to protect you and your bank account. Texas homes face various leak risks, from subtle pipe leaks in the foundation if it shifts to a slow drip under the bathroom sink. Most of these types of leaks you won't see for weeks, months, or maybe even a year. They are silently destroying your home. Without slow leak coverage, which isn't on a standard home insurance policy, you will be left holding the bag on the repairs.
- Foundation Access Coverage: Finally, foundation access coverage is something you shouldn’t overlook. If you have a plumbing issue that requires foundation work, without this coverage, the financial burden falls entirely on you. And while that isn't very neighborly, those cheap home insurance policies don't care.
We see comparison quotes all the time where these four items are either left completely off or the amount of coverage provided is so low that it might as well be left off. It's become a slick way for agents to "make the policy cheaper" as the average home insurance rates have soared. WE know that these not so average costs are hurting pocket books, but you have to be aware of what you have at risk.
4. Named Peril vs. Open Peril Policies
Item number four may sound kind of weird. It's likely that you've never heard of it before. But when it comes to covering your home, there are two primary types of policies: named peril and open peril. Named peril policies list specific risks that are covered, while open peril policies cover all risks except those explicitly excluded. In Texas, where we face a variety of weather extremes, open peril policies generally offer broader and more comprehensive coverage. This is particularly relevant for storm damage types, like rain water intrusion under shingles during high winds. You don't want to find out that this isn't covered after it has already happened! It's like choosing a hat in Texas; you want one that provides the broadest protection against the sun.
5. Extended Replacement Cost
Finally, is the inclusion of extended replacement cost in your policy. This coverage makes sure that you can rebuild your house without borrowing more money if we see the prices of labor and materials spike. Where have I heard of that before? Without it, you might find yourself asking how to get a second mortgage in a rebuild. Which sounds like a terrible time. It’s like insuring your rodeo prize bull – you want to make sure its value is fully covered, not just partially.
How Can You Skip The BS?!
At Insurance For Texans, we're committed to more than just selling pieces of paper. We're here to ensure you have the right protection, like a sturdy pair of boots during a Texas storm. We understand that budgets are constricting and that the average rates have gotten completely out of control for a standard homeowners policy. The homeowners insurance policies that we have bought for our own homes have done the same thing that yours has done. We also know that policy offerings from homeowners insurance companies have shrunk and that the underwriting requirements have gotten much tougher. But that doesn't mean that you throw the baby out with the bathwater. Remember, when you're comparing home insurance proposals, keep these five areas in mind.
If you need help navigating the complex world of homeowners insurance quotes, insurance costs, and the general confusion that is homeowners insurance rates right now, remember that TRUE Texas Home Insurance is only found in one place. Insurance For Texans is here to make sure that Texans get a square deal if they are going to fork out the outrageous costs of the current premiums for standard home insurance policies. Our insurance agents are here to make sure that you don't just have an insurance quote that may or may not actually cover you for what you need.
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