Texas homeowners · How the contract works
It pays covered damage. It does not maintain the house.
A Texas homeowners policy shares the cost of damage from the perils it lists, or from perils it does not exclude, up to the limits. It also pays certain liability claims. It does not pay to replace a worn roof because it is old, and it does not fund a remodel. Closing the loan and binding this policy are two different events. The lender wants proof. The policy is the contract.
The product: Texas homeowners products and what it covers. En español: cómo funciona.
The dwelling limit is rebuild cost
Coverage A is the cost to rebuild the structure, not the sale price and not the county tax value. Land is not insured. Many HO-3 forms pay replacement cost on the dwelling only if it is insured to about 80 percent of rebuild cost. Below that, a large fire can pay less than the rebuild. Dwelling coverage and how the policy is put together.
Wind and hail are often a separate deductible, a percent of Coverage A. Two percent of a $400,000 dwelling is $8,000. That comes off the hail claim before the company pays. Example only. Your belongings are a different limit, and off the premises that limit is often about 10 percent of contents coverage. Common, not universal.
Liability, loss of use, and what sits above the policy
Liability pays other people you injure, up to its limit. It does not rebuild the kitchen. Loss of use pays extra living costs when a covered loss makes the house unlivable. It is not rent you chose to pay while you remodel. An umbrella pays only after the homeowners liability limit is used up. It is not extra Coverage A. Umbrella. A lapse between policies is its own problem: cancellations and lapses.
