You can buy a dwelling policy that covers only the structure of your house. Or, like most Texans who own their homes, you can buy a homeowners policy, which combines five different types of coverage:

Dwelling - pays for damage to your house and any outbuildings, such as detached garages and storage sheds.

Personal property - pays when household items, including furniture, clothing and appliances, are damaged, stolen, or destroyed.

Liability - protects you against financial loss if you are found legally responsible for someone else's injury or property damage. A homeowners policy automatically provides $25,000 in coverage. You can buy up to $1 million in coverage for an extra premium.

Medical payments - pays medical bills for people hurt while on your property. It also pays for some injuries that happen away from your home, such as your dog biting someone. A basic homeowners policy pays $500 in medical bills. You can pay extra and get up to $5,000 in medical payments coverage.

Loss of use - pays living expenses if your home is too damaged to live in during repairs. The most common policy pays up to 20 percent of the amount for which your house is insured.

Until fairly recent, companies in Texas primarily sold four different home  property policy types (described below).  However, more recently, another type of policy know as the ISO form has been introduced and more and more companies have adopted this policy form in lieu of the HO forms.  Under the HO form, the basic policy was the same and it was usually only price and endorsements that made one companies policy different from another.  Now however, with the introduction of the new ISO forms, companies can "custom" make their forms in such a way that one companies policy can now greatly differ from another's.  So it now becomes even more important than ever to review your policy to make sure you have a clear understanding of what is and is not covered or if there are any coverage limitations.

• HO-A policies provide extremely limited actual cash value coverage of your home and its contents. Only the types of damage specifically listed in the policy are covered.
• HO-A amended policies provide more extensive coverage than the base HO-A policy but less coverage than an HO-B.
• HO-B policies provide replacement cost coverage for most types of damage, except those specifically excluded in the policy.
• HO-C policies provide the most extensive coverage, but are more expensive than other types of policies.
• National policies are policies of national insurance organizations or large national companies that the Commissioner of Insurance has approved for sale in Texas. Coverage provided by these policies may differ considerably from one another and from the coverage provided in standard Texas homeowners policies.

Generally, HO-B policies provide the most coverage for the price, but some companies may not offer the HO-B policy.

Companies may exclude coverage for certain losses. For example, if you live on the Gulf Coast, you might receive an endorsement that excludes coverage for wind and hail damage. In some areas with a history of hail storms, some companies provide only actual cash value coverage for roofs instead of full replacement cost. Actual cash value pays for damage minus depreciation on the roof, depending on its age and condition.

Most policies will not cover mold remediation beyond that necessary to repair or replace property damaged by a water loss otherwise covered by the policy. The HO-A policy offers no coverage for mold remediation or for damage caused by sudden and accidental water leaks, although some companies may offer that coverage as an endorsement to the base HO-A policy. If you have an HO-B policy, you will be able to buy additional coverage in increments of 25 percent, 50 percent, and 100 percent of your policy's limits to cover mold remediation. 

Note: If you have an HO-B policy that was bought or renewed before January 1, 2002, your policy may cover mold remediation up to your policy limits without an added endorsement. Ask your agent or company whether your policy covers mold remediation.

• Renters: A landlord's insurance does not cover a renter's personal property. Renters insurance covers your belongings, provides liability protection, and pays extra living expenses if a fire or other disaster forces you to move temporarily from your rented home.
• Condominiums: Condominium insurance matches the benefits of renters insurance, and also covers damage to improvements, additions, and alterations to the condominium unit.
• Townhouses: Townhouses may be insured by either an individual homeowners policy or an association master policy. If a townhouse is owner-occupied and the townhouse association does not have a master policy on the building, you can purchase a homeowners policy on your individual unit. If the association has a master policy, you should get a Texas tenant homeowners policy to insure your personal property.
• Mobile homes: Mobile homes without wheels and resting on blocks or a permanent foundation qualify for a homeowners policy. However, most mobile homes are insured by a Mobil owners policy. A Mobil owners policy is an auto policy that covers mobile homes used as residences. Mobil owners policies offer extremely limited coverage.
• Farm and ranch owners: Farm and ranch owners policies insure homes outside city limits on land used for farming and raising livestock. You can pay extra and get coverage for certain farm equipment and outbuildings.

Maintain Adequate Coverage

Buy enough coverage to avoid a major financial loss if you have a fire or other loss. This means keeping a realistic dollar amount of coverage on your house.

• Outside doors must be solid core doors that are 1 3/8 inches thick and secured by deadbolt locks.
• Metal doors must be secured by deadbolt locks.
• Double doors must meet the standards for outside doors. The inactive door must be secured by header and threshold bolts that go into metal strike plates. If door glass is within 40 inches of the header and threshold bolts, the bolts must be flush-mounted in the edge of the door.
• Dutch doors must have concealed flush-bolt locking devices to interlock the upper and lower halves and must be secured by deadbolt locks.
• Garage doors must be equipped with key-operated locking devices.
• Windows must have auxiliary locking devices.
• Sliding glass doors must be secured by secondary locking devices to prevent lifting and prying.

Burglar alarm: You can reduce your insurance premium by 15 percent if you have an electronic burglar alarm system that meets these requirements:

• The system must cover all doors, windows, and other exterior openings, such as skylights.
• You must have both an interior and an exterior siren.
• The system must be listed by Underwriters Laboratory and monitored by a UL-listed central station.
• Sales, service, installation, and monitoring of the system must comply with the Texas Private Investigators and Private Security Agencies Act.

Contact the crime prevention unit of your local police department or sheriff's office to get an inspection to qualify for the mandatory burglar alarm and home security discounts.

Sprinkler system: You can save 8 percent on your homeowners premium if your home has an approved fire protection sprinkler system. Sprinklers provide a 12 percent discount on the fire insurance premium of dwelling and farm and ranch policies. A licensed inspector must certify that the system meets National Fire Protection Association standards. You will receive a certificate to qualify for the discount. For information on registered fire protection sprinkler system contractors, call the Texas Commission on Fire Protection at 512-918-7100.

Impact-resistant roofs: Companies may offer up to a 35 percent discount on homeowners insurance for impact resistant roofs. These roofs are made of materials that experience less damage from hail. The actual discount amount depends on where you live and the type of roof installed. Insurance companies must give discounts for all impact-resistant roofs tested by a qualified, approved laboratory. Some companies require you to give up coverage for cosmetic damage to your roof to get the discount.

Optional Discounts

Companies also may give optional discounts. Check with your company to see if you qualify for any of the following discounts. The amounts listed are maximum discounts:

• Age of house (companies set own standards) = 15 percent
• Noncombustible roof = 2 percent
• Premises in good condition (companies set own standards) = 2 percent
• Good claims experience for three consecutive years = 5 percent
• Other policies with same company or group = 5 percent
• House insured to full replacement cost = 5 percent
• Senior citizens discount = 5 percent
• Burglar, fire, and smoke alarm systems that do not qualify for the mandatory electronic -- security discount may qualify for an optional discount:
  • Central station = 12 percent
  • Remote alarm = 10 percent
  • Local alarm = 2 percent
  • Combination fire, smoke, and burglar alarm system = 15 percent
• Automatic sprinkler systems that do not qualify for the mandatory discount = 8 percent
• Fire extinguishers = 2 percent
• Home security devices = 5 percent
• Stovetop fire suppression devices = 1.5 to 6 percent

• Remove Potential Risks

  You can make your home more insurable by changing things that insurance companies and agents interpret as signs of potential risk. Look around your home for problems that could cause damage or injury, such as a heavy tree limb hanging over your roof, loose porch railings, or cracks in your walkways.

   

• Watch Out for Crime

  Since theft is a common cause of homeowners claims, some insurers may not be willing to insure homes that seem vulnerable to crime. While you cannot stamp out crime by yourself, you can take a few steps to make yourself less vulnerable. These precautions could also lower your insurance premiums.

  • Call the crime prevention officers of your local police force. They can inspect your home and give you specific advice on protecting it.
  • Install dead bolts or other security devices on doors and windows.
  • Work with your neighbors to start a Neighborhood Watch Program. Your local police department has helpful information.
  • Install a burglar alarm that alerts the police or a security company.
  • Keep trees and shrubs trimmed, especially around windows and entryways. Overgrown shrubbery can provide hiding places for would-be burglars. Avoid parking cars on the street. Cars parked on the street are tempting targets for thieves and vandals and, like overgrown shrubs, can provide handy hiding places.
  • Keep the area around your home well-lit.
  
  
• Maintain Your House and Yard

  Your homes appearance is important when you're looking for insurance. Since companies want to avoid losses from injuries or accidents, agents look for signs of poor maintenance. Agents might assume that a cluttered yard and faded paint suggest an unsafe home. The outside of your home will be inspected when you apply for insurance, often when you are not at home. Insurance companies have the right to cancel a policy within the first 90 days for any reason, and some may reject new customers because an inspection revealed a home in need of repair.

  • Fix any obvious signs of damage, such as rotting boards, sagging screens, or a loose front door.
  • Remove anything from your property that could easily cause an accident.
  • If your roof leaks, you should fix or replace it. Water stains on a ceiling tell an agent inspecting the inside of your home that you might have a future claim for water-damaged property.
  • Keep your yard clean and trim.
  • If your paint is peeling or faded, consider repainting.

Losing Your Insurance

Knowing your rights can help you overcome setbacks when you are rejected for homeowners insurance or lose your coverage. If you request it, a company must explain in writing its reason for declining, canceling, or not renewing your policy. If a company denies you because of your credit history, it must tell you why. You may file a complaint with TDI if you believe the company improperly denied you insurance.

• If the company fails to notify you after a second related-related claim, it cannot refuse to renew your policy because of a third claim.
• Instead of non-renewable, the company can charge and added premium called a surcharge. A company can add a surcharge for filing two or more related-related claims the previous policy year.

Company may not non-renew your policy for weather-related claims or for claims that were not paid or not payable under your policy.

Your Rights Against Unfair Discrimination

An insurance company cannot deny, refuse to renew, limit, or charge more for coverage because of your race, color, religion, or national origin.

A company also cannot deny, refuse to renew, limit, or charge more for coverage because of your age, gender, marital status, geographic location, disability or partial disability - unless the refusal, limitation, or higher rate is "based on sound underwriting or actuarial principles." Sound underwriting or actuarial principles means the company would have to show valid statistical evidence that your home presents a greater risk for a loss than other homes it is willing to insure.

A company cannot unfairly discriminate between individuals of the same rate class and with essentially the same risk in its rates, policy terms, and benefits, or in any other manner unless the refusal, limitation, or higher rate is "based on sound actuarial principles."

In addition, a company cannot refuse to insure a home based solely on its age or low value. Companies can offer discounts for newer homes and require updates to the wiring, plumbing, and heating systems before agreeing to insure an older home. If you live in an older home that has been updated, you may be placed in a higher -- priced company.

• A company that needs more time can take 45 days to make a decision if it sends you a notice explaining the delay.
• A company that suspects arson has 30 days after receiving the required paperwork to either accept or reject a claim.
• TDI can give companies an extra 15 days after a major natural disaster.
• Surplus lines carriers have 20 days to pay your claim after agreeing to do so.

A company that takes too long to pay is liable for your reasonable attorney fees plus damages equal to 18 percent of your claim if you sue and win. In an insurance claim lawsuit, the insurance company has the burden of proving it was not obligated to pay. If you are financing your home, your insurance company may require your lender to sign or approve your claim check. When this happens, the lender must act within 14 business days after receiving the request. Failure to act within this time period could result in a $500 civil penalty. Complaints about lenders failing to process claim payments should be directed to the Texas Attorney General's Office at 1-800-252-8011.

Claim Tips

To make the claim process run smoothly and to protect your rights, follow these steps:

1. Know your coverage. Your policy's dollar limits and benefits appear on your policy's Declarations page. If you need help, ask your agent or company representative.
2. If you have a loss, notify your agent or insurance company immediately. Report losses involving theft or crime to the police.
3. Make a list of your damaged property. If possible, photograph or videotape the damage before making any repairs.
4. Make only temporary repairs to protect your house and belongings. The insurance company may deny your claim if you make permanent repairs before it inspects the damage. If you are not sure whether a repair is considered permanent, contact the insurance company before beginning repairs. The cost of these repairs and for storing personal belongings is covered by your policy. It is important to make only temporary repairs.
5. Keep receipts. For personal property claims, you must provide evidence that you bought the replacement items. If you bought materials for temporary repairs, receipts will help you get reimbursed quickly.
6. Try to be there when the insurance company's adjuster inspects your home. You may have your own contractor or builder represent you. In times of major disasters, it might not be possible to meet with the adjuster.
7. If you have to move because of a disaster, make sure your address is visible. Leave a sign with your temporary address, phone number, and the name of your insurance company.
8. If you use a public adjuster, make sure you know the fee. Public adjusters help consumers with their homeowners claims. They generally charge a percentage of your claim settlement. In most cases, you probably don't need a public adjuster.

Proof of loss. Within 15 days after you report your loss, the company may request a signed, notarized proof-of-loss form. In most cases, the company will ask you to estimate the replacement cost of the household items you lost and the cost of repairing your home. Contractors, catalogs, and retailers are good sources of current price information.

• Include sales tax in your cost estimates.
• Ask whether you should use exact costs, or if you can round numbers to the nearest dollar.
• Don't forget to include small items such as kitchen utensils or clothing accessories.

The company will use the form to decide the value of your claim, so make your list as complete and as detailed as possible. Include photos and receipts. Be sure to keep copies for your records.

Final estimate. The adjuster will prepare an estimate of the cost to repair or replace your home and any personal belongings. The insurance company's offer is based on this estimate.

Disputes. If you disagree with the adjusters estimate, tell the company why. The company may have overlooked something and may make adjustments. If you still disagree, you can use a process called appraisal.

The appraisal process governs only disputes over the amount to be paid. It is not for settling disputes about coverage or the cause of a loss.

You and the company each hire an appraiser. The two appraisers then choose a third one as umpire. Your appraiser and the company's appraiser make their own estimates of your loss. If they differ, the umpire makes the final decision, which is binding on both you and the company. You are responsible for the expenses of your appraiser and for half of the umpires expenses.

Payment. Once the company agrees to pay all or part of your claim, it must do so within five business days. If you don't get your check within five days, contact your agent or company. If you believe that the company is delaying payment intentionally, contact TDI for help.

Note: Most companies pay homeowners claims with two checks. The first, issued after the adjuster reviews your loss, is for the estimated cost of repairs, minus depreciation and your deductible. The company issues the second check for the balance of your claim after receiving the contractors bill for the finished job, as long as the repairs or replacements are completed within 365 days of the date of loss. You may submit a written request for an additional 180 days extension.

Q: What if Licensed Companies Won't Insure My Home?
A: If you can't find a licensed company willing to cover your home, contact your agent regarding the state's, Texas Fair Plan.  If you're unable to obtain insurance through the Texas Fair Plan, your last resort might be to obtain insurance from a more expensive and perhaps less financially stable surplus lines carrier.

Q: My insurance company refused to renew my homeowners policy because I filed a claim. Can it do that?
A: It depends on the type and number of claims you have filed. A company cannot refuse to renew your policy because of weather-related claims. It can decline to renew a policy, however, if you have three or more non-weather related claims in a three-year period.

Q: My homeowners policy is coming up for renewal but the company says it will drop me if I don't replace my leaky roof. Is this legal?
A: Yes. An insurance company may refuse to renew a policy because of a homes condition. This can include a worn -- out roof. The company must give you at least 30 days´ written notice before not renewing your policy, but some companies give you six months to a year to make repairs. If your roof needs replacement because of a storm or other covered loss, the company must pay for the work (minus your deductible). If the roof is just worn out, you are responsible for paying to replace it.

Q: I recently moved out of my home. Can the company cancel my homeowners policy? Do I currently have coverage on my home?
A: The company may not cancel your policy because your house is vacant. However, the policy itself automatically suspends coverage for damage to your house if the house is vacant for 60 days or longer. The policy's liability coverage's will continue. However, the vacancy could cause the company to refuse to renew the policy when it expires.

Q: I shopped carefully before picking a new homeowners insurance company. Two months later, I received a cancellation notice. Can the company do this?
A: Yes. A company will evaluate an application to determine if it qualifies under its guidelines for new business. During the first 90 days after a policy takes effect, the company may cancel it for almost any reason, provided the consumer receives 30 days´ written notice. If the company cancels the policy, it must refund your premium, minus the portion paid for coverage actually received.