For All Types Homes
THE RIGHT COVERAGE AT THE RIGHT COST
Some of Texas’ largest cities also have the highest rates in the state. For Houston, insurance.com places the average annual home insurance rate at over $2700. The average rate is for a policy including $200,000 in dwelling coverage, a $1,000 deductible and $100,000 in liability coverage. This is about twice as much as the average HI rate for San Antonio, Austin and Dallas.
As a point of clarification, the price of something is not the same as its cost. For example, let’s say I scored a pair of designer sunglass at a clearance price of $20. However, I had to drive to the outlet mall which is two hours away. Assume an hour of my time, typically at work, is worth $30. That means the cost of the glasses is actually now $80. The price of the glasses plus the two hours of my time, and this doesn’t include the price of gas, is the cost. This same principle applies to the purchase of your HI insurance.
When comparing the various home policies, there are many factors to consider in addition to price. Things you may consider include who your agent/ broker is, types of insurance policies offered, the value of your home, etc.
Pay attention to deductible amounts, coverage limits and the definitions of coverages and exclusions. Different insurance companies, for instance, may have different definitions of what constitutes a “flood” or “wind damage”.
Terminology contained in insurance policies impacts whether you have too much or too little coverage and whether you lose or save money. As a case in point, we’ll use the terms “replacement cost” and “actual cash value”. These are two different types of coverages. Replacement cost coverage is what you pay to replace or rebuild your home based on current construction costs, not your property’s market value. Actual cash value is what you pay to replace or rebuild your home minus the depreciation.
Keep in mind that even the most comprehensive insurances policies have exclusions and limitations. Even so, having the right coverage(s) can have several benefits. But, how do you know what the right coverages are?
The Right Coverage. The Right Price. The Right Value
FINDING AN INSURANCE AGENT
If you’re on the market for insurance, of any type, you’d be smart to shop around. Other than the purchase of our home itself, the purchase of homeowner’s insurance is a major decision. Homeownership is one of life’s major milestones. Protecting such an important investment, correctly, is key.
Nowadays, finding an agency is as easy as point and click. There are hundreds of websites dedicated to helping consumers compare insurance agencies and their rates. Information seeking will help you find the homeowners’ policy that best meets your needs. If you’re not keen on sifting through internet sites, you can always ask family, friends and neighbors for recommendations.
Homeowners insurance (HI) policies vary widely from state to state and even city to city. For this reason, it’s important to understand that not all coverage is the right coverage. A good insurance agent will help you sort through your policy options and answer your questions. They will also make themselves available in the event you need to file a claim.
Finding an agency and the right agent takes a bit of effort, but it will save you money in the long-term. Experts recommend getting anywhere from 3 to 5 quotes. Getting multiple quotes puts the power in your hands as a consumer. Why? For one, it helps you make sure you’re dealing with a reputable company.
I often recommend folks check out the Better Business Bureau website to view company ratings. Those businesses with higher ratings tend to be fair in their dealings with consumers and provide top-notch customer service. Second, multiple quotes give you leverage to negotiate with HI providers. Third, and related to my previous point, it can save you money.
Protection For Texans
TYPES OF POLICIES AND THEIR COVERAGES
Texas offers two types of homeowner’s insurance policies: comprehensive coverage and named perils coverage. Comprehensive coverage offers protection covering all causes of loss, except any specifically excluded in the policy. On the other hand, named perils coverage will only cover causes of loss which are specifically outlined in the policy.
Based on the type of policy you choose, there are different types of coverages. Coverage for your personal property, for example, is usually limited to a percentage of your dwelling coverage. If the value of your personal property exceeds the coverage provided by your HI policy, you may be able to purchase additional protection, but this may increase your premium. Most policies provide coverage for losses caused by everything from theft to explosions!
Being that you are a Houstonian, you are well aware that Houston is subject to floods, hail and windstorms. Unfortunately, the majority of home insurance policies don’t cover any of these. Therefore, in addition to an HI policy, you may be required by your lender to purchase flood insurance. You also have options to buy hail and windstorm coverage through the Texas Windstorm Insurance Association (TWIA).
Refer back to the example of price vs. cost, except think of it in terms of insurance. Suppose you bought your policy solely based on price. In fact, you didn’t even bother to read the policy because it was so incredibly cheap. As a result, you failed to realize that your HI policy doesn’t cover losses caused by hurricanes because you live on the Gulf Coast. Your home was one of the properties destroyed by Hurricane Harvey. Nothing was salvageable and you were forced to rebuild. Now, what is the true cost of that policy?
The benefits of having the right coverage(s) are illustrated in the above example. Knowing your policy’s terms, conditions and coverages is key to having the protection you need when you need it. Also, although at face value a policy may seem less expensive, it may not be. In the long-term, you save by buying the right coverage.
Since 1993
Homeowners Insurance Houston – Protecting Dallas, Austin & San Antonio, Texas
I’ve written in the past about home insurance in Texas. It’s no secret that homeowner’s insurance can get ridiculously expensive depending on where you live. If you live anywhere in Texas, that’s not El Paso, you’ll likely end up paying more for insurance. Notice, I said ‘likely’. That means it may or may not happen.
THE FLIP-SIDE OF HOME INSURANCE COVERAGE
We’ve all done it. At some point or another, we’ve all bought something we didn’t need. Oddly enough, this can happen when we’re buying insurance policies. When buying a policy for your home, make sure you aren’t paying for coverage(s) you don’t need.
If you don’t live in a neighborhood that has high crime and vandalism rates, you may not need the higher levels of personal property protection offered by the insurance company. Foregoing or eliminating unnecessary coverages may effectively reduce your premium. There is such a thing as having too much homeowner’s insurance coverage.
An insurance policy that’s right for you will provide you with adequate protection while still being within your financial means. Life has enough challenges without the added stress that happens when there are emergencies and natural disasters. Be your own advocate. Ask questions, get quotes from Homeowners Insurance Houston and do your research.
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