You’ve found your dream Texas home in your ideal neighborhood, you’ve finally closed on your home, and your keys are in hand– congratulations! There’s just one big task left: finding the best deal on Texas homeowners insurance to protect your home. Your home is your biggest investment. Unlike a car that starts depreciating as soon as you drive it off the dealer’s lot, your home will typically increase in value as long as you own it. For some super hot housing markets near Austin, Dallas-Fort Worth, Houston and San Antonio, home values have shot up as much as 20 percent or more over the last decade. That’s a major increase! Now imagine that a fire, flood or tornado were to damage your home. Without a comprehensive home insurance policy, you’ll be stuck holding the bill for all these damages, not to mention sustaining a major loss on your biggest investment.
When searching for the best deal on homeowners insurance in Texas, it pays to research all your options. Annual home insurance premiums can vary by $1,000 or more within the same city and zip code depending on the policy amount, provider, and type of coverage. Spending time researching your different options is a smart investment to ensure your home is fully covered at a price that’s right for your budget.
What to Consider When Buying Texas Homeowners Insurance
While exact policies may vary, homeowners insurance typically provides coverage to the main dwelling on your property (your home), other structures (like a detached garage or fence), and the personal property in your home against theft, fire, and natural disaster. Most policies include similar coverage for theft and fires; however, different homeowner policies may offer different types of weather-related coverage. There’s an old saying in Texas: if you don’t like the weather, just wait five minutes– it’s bound to change! From floods and wildfires to tornadoes and hurricanes, Texans need to be prepared for just about every weather event. (If you live up in the panhandle or out in West Texas, you’ll need to be prepared for the occasional snowstorm, too!)
In addition to standard protection against fire and theft, you may need to purchase wind/hail protection and flooding protection. For example, the Texas Windstorm Insurance Association offers wind and hail coverage to residents in the 14 coastal counties and parts of Harris County on Galveston Bay. Depending on where you live in Texas, you will want to confirm your insurance includes protection against tornadoes, floods, wildfires, and/or hurricanes.
Actual Cash Value Versus Replacement Cost Coverage: Additional Considerations
Keep in mind that while standard homeowners polices will provide coverage against personal property these reimbursements may be capped at a certain dollar amount. Reimbursement depends on whether your coverage is “actual cash value” or “replacement cost coverage.” Actual cost value coverage is generally less expensive than replacement cost coverage. However, this means you will only be reimbursed the “fair market value,” which reflects item depreciation. Personal items like your furniture or electronics will only be replaced at the value you’d get if you were to sell them now, not the amount of money you paid to purchase them. This means if you paid $3,500 for that 60-inch flat-panel TV four years ago, you may only be reimbursed $1,000 today since that’s the “fair market value.” Replacement cost coverage means that your insured personal property will be covered for what it would cost to purchase an item brand new. You’ll get the full cost of purchasing a comparable 60-inch flat-panel TV today, rather than a smaller amount based on the depreciated value. Actual cash value policies typically cost less than replacement cost coverage, but may also leave you without adequate insurance in the event of a fire, theft or other natural disaster.
Finding the Best Deal on Homeowners Insurance in Texas
When shopping for the best insurance prices, keep in mind that bundling your home owner’s insurance and auto insurance together may help to lower costs by as much as 30 percent. Finally, your credit rating also impacts your annual premium. Home insurance premiums are generally lower for individuals with a high credit score who have not maxed out their credit lines and pay off debt on time. Unlike auto insurance, there’s not as much competition among home insurance policies. However, you may still be able to save as much as $1,000 by shopping around, according to Consumer Reports.
The Texas Department of Insurance helps to simplify this process by publishing comparison rates for different homeowner’s policies in your region on its website. Once you have entered some basic information (county, zip code, general credit rating, claim history, estimated coverage policy, and value of your home), the website will display policy’s comparable for your area.
For example, a $200,000 policy for someone with good credit and a claim-free history in Travis County, Texas (which includes the city of Austin), may range from $528 on the low end to $2,000 on the high-end per year. In Tarrant County, Texas (which includes Forth Worth and surrounding suburbs), the same $200,000 policy runs between $1,300 to over $3,000 per year. The Texas Department of Insurance comparables includes information on each company and policy type, including performance ratings, any rate changes within the last period, and the consumer complain index rating.
How to Check Texas Homeowners Insurance Ratings
The true test of homeowners insurance is how effectively a company handles your claim. Some agents have rightly earned a reputation for responsiveness and customer satisfaction, while others have left a lot to be desired. Consumer Report is one of the best online sources for comparing agents and insurance companies. Talk to friend, family and neighbors about their experiences with their agents.
Once you’ve picked an agent and policy, it’s worth checking in with your agent every year to ensure your policy still matches your needs. Don’t assume your policy limits will automatically adjust to reflect your home’s rising value! Check with your agent yearly to ensure your current policy still reflects your home’s fair market value and that you’re not inadvertently underinsured.
2 Point Highlight
1- The Texas Department of Insurance publishes comparison rates for different homeowner’s policies on their website.
2- Annual home insurance premiums can vary by $1,000 or more within the same city and zip code depending on the policy amount, provider, and type of coverage.
