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Curious about the particulars of Home Insurance in the state of TX? The Texas Department of Insurance explains in easy to understand terms what you need to know about protecting your home in the great state of Texas. We hope you enjoy the article and happy savings.
The Instant Insurance Quotes Online Team
About Texas Homeowners Insurance
Source: The Texas Department of Insurance
Texas Homeowners Policies | Other Types of Residential Property Policies | Shopping for Homeowners Insurance | Understanding Rates and Premiums | Having Trouble Insuring Your Home? | Losing Your Insurance | If You Have a Claim | Get Help from TDI
Homeowners insurance pays to repair or replace your house and personal property if they’re damaged or destroyed by an event or occurrence covered by your policy. These events or occurrences are called “covered losses.”
Note: An insurance policy is a contract between you and your insurance company. Read it carefully to understand exactly what it covers and the dollar limit of the coverage. You should also understand your rights. Texas has a Consumer Bill of Rights for homeowners and renters insurance. Your insurance company must send you the Bill of Rights when you get or renew a policy.
Most homeowners policies in Texas include the following coverages:
- Dwelling pays if your house is damaged or destroyed by a covered loss.
- Personal property pays if the items in your house (such as furniture, clothing, and appliances) are damaged, stolen, or destroyed.
- Other structures pays to repair or rebuild structures not attached to your house, such as detached garages, storage sheds, and fences.
- Loss of use pays your additional living expenses (housing, food, and other essential expenses) if you have to temporarily move because of damage to your house from a covered loss. Your policy will pay either a percentage of the amount of your dwelling coverage (typically 10 to 20 percent) or for a specific period after the loss (such as 24 months).
- Personal liability pays to defend you in court against lawsuits and provides coverage if you are found legally responsible for someone else’s injury or property damage.
- Medical payments pays the medical bills of people hurt on your property. It might also pay for some injuries that happen away from your home, such as your dog biting someone at the park. A basic homeowners policy pays $500 in medical bills, but you may buy up to $5,000 in medical payments coverage.
Types of Policies
Insurance companies in Texas may sell several types of policies. If a company offers you a policy with less coverage than you’d like, ask if other policies are available. You may also be able to buy additional coverage by adding endorsements to your policy.
Two types of policies sold in Texas are:
- All-risk policies (also known as a comprehensive coverage or open perils coverage). These policies offer you broad protection and cover all causes of loss unless the policy specifically excludes them.
- Named perils policies (also known as specified perils coverage). These policies offer narrower protection than an all-risk policy and cover only the causes of loss specifically named in the policy.
Policies typically provide replacement cost or actual cash value coverage:
- Replacement cost is what you would pay to rebuild or repair your home, based on current construction costs. Replacement cost is different from market value and doesn’t include the value of your land. Ask your insurance company if you aren’t sure how much it would cost to rebuild your house.
- Actual cash value is what you would pay to rebuild or replace your property minus depreciation. Depreciation is a decrease in value due to wear and tear or age. If your home is destroyed and you only have actual cash value coverage, the insurance company will not pay enough to completely rebuild your home.
To compare policies approved for sale in Texas, visit the Office of Public Insurance Counsel (OPIC) website.
Companies may exclude coverage for certain losses. Even the most comprehensive all-risk policy will exclude certain types of damage.
The following chart shows the most common types of losses covered or excluded from a homeowners policy.
|Most Policies Cover Losses Caused by||Most Policies Do Not Cover Losses Caused by|
|Fire and lightning||Flooding|
|Sudden and accidental damage by smoke||Earthquakes|
|Explosion||Termites, insects, rats, or mice|
|Theft||Freezing pipes while your house is unoccupied (unless you turned off the water or heated the building)|
|Vandalism and malicious mischief||Losses if your house is vacant for the number of days specified by your policy|
|Riot and civil commotion||Wear and tear or maintenance|
|Aircraft and vehicles||Wind or hail damage to trees and shrubs|
|Windstorm, hurricane, and hail (this coverage may be excluded if you live on the Gulf Coast)||Mold, except what is necessary to repair or replace property damage caused by a covered water loss|
|Sudden and accidental water damage||Water damage resulting from continuous and repeated seepage|
If you rent out your house for short-term lodging, ask your agent if your policy provides coverage for damage to your house or for medical bills if someone staying in your rented house is injured. Most policies don’t cover these types of damages or injuries, but your agent might be able to sell you extra coverage.
If you’re a guest, your homeowners, renters, or personal liability insurance policy might cover you if you damage a host’s property. Read your policy or ask your insurance agent before you rent. If you’re renting through an app or website that offers insurance coverage, ask your agent if you need that protection.
Policy Dollar Limits
A policy’s dollar limits are the maximum amounts your insurance company is required to pay if your house is destroyed. The declarations page at the front of your policy shows your policy’s dollar limits. Review your limits to make sure you have enough coverage to rebuild if your house is damaged or destroyed. Ask your insurance agent or a company representative if you have any questions about your insurance limits.
To get full payment (minus your deductible) for a partial loss (such as a hail-damaged roof), most companies require you to insure your house for at least 80 percent of its replacement cost. If you insure your house for less than 80 percent of the full replacement cost, the insurance company will pay only a portion of the loss. Some companies might require you to insure your house for 100 percent of its replacement cost.
Coverage for Your Personal Property
Homeowners policies cover your personal property (such as furniture, clothing, and household electronics) as a percentage of the amount of your dwelling coverage limits. For example, if your company insures your personal property at 40 percent of your dwelling coverage and your house is insured for $100,000, your items are insured for up to $40,000. You might be able to buy more coverage by paying a higher premium.
Homeowners policies usually cap the coverage amounts for some types of personal property, such as jewelry and art. Tell your agent or company about any special items you have that you’d like to insure. You may be able to buy additional coverage for these items for an extra premium.
Typically, a homeowners policy will pay only the actual cash value of damaged, stolen, or destroyed personal property.
Inventory Your Property
Many people learn after a fire or storm that they didn’t have enough personal property coverage. Making a written inventory will help you decide how much coverage you need. It will also simplify claims.
Your inventory should list each item, its purchase date, value, and serial number. Photograph or videotape each room, including closets, open drawers, storage buildings, and garage. Keep the inventory and receipts for major items in a fireproof place or another location. Use the Texas Department of Insurance (TDI) Home Inventory Checklist to help create your inventory.
- Renters insurance. A landlord’s insurance doesn’t cover a renter’s personal property. Renters insurance covers your belongings, provides liability protection, and pays additional living expenses if a fire or other event covered by your policy forces you to move temporarily.
- Condominium insurance. Condominium insurance covers your belongings, provides liability protection, and pays additional living expenses. It also covers damage to improvements, additions, and alterations to the condo.
- Townhouse insurance. 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 doesn’t 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.
- Mobilowners insurance. Mobile homes without wheels and resting on blocks or a permanent foundation may qualify for a homeowners policy. However, most mobile homes are insured by a mobilowners policy. A mobilowners policy is an auto policy that covers mobile homes used as residences. Mobilowners policies typically offer limited coverage.
- Farm and ranch insurance. Farm and ranch owners policies insure homes outside city limits on land used for farming and raising livestock. You can pay extra to get coverage for certain farm equipment and outbuildings.
Other Types of Insurance You Might Need
Windstorm and Hail Insurance
Most homeowners policies don’t cover windstorm and hail damage if you live in any of the 14 coastal counties or parts of Harris County on Galveston Bay. The Texas Windstorm Insurance Association (TWIA) is the state’s insurer for windstorm and hail coverage. You may buy TWIA coverage through local insurance agents if you need it.
When a hurricane enters the Gulf of Mexico (80 degrees longitude and 20 degrees latitude), you may no longer change or buy windstorm coverage.
If you plan to build, add to, or renovate a home or other structure and want to get or maintain TWIA coverage, you must get a certificate of compliance (WPI-8 or WPI-8C) by having your property inspected. During the construction phase, you can get an inspection from a TDI windstorm inspector or from a Texas-licensed professional engineer appointed by TDI to receive a WPI-8 from TDI. For completed construction, you can get an inspection from a Texas-licensed professional engineer to receive a WPI-8C from TWIA. Ask your agent how to get an inspection.
For more information about windstorm coverage, visit the TWIA website or call 1-800-788-8247.
For more information or questions about TWIA claims, visit TDI’s Coastal Outreach and Assistance Services Team (COAST) program website or call 1-855-35COAST (1-855-352-6278).
Homeowners policies typically don’t cover damage caused by floods. To protect yourself from losses caused by floods, you’ll need to buy a separate flood insurance policy. If your property is in a special flood hazard area, your lender will require you to have flood insurance. A special flood hazard area has a 1 percent chance of being flooded in any given year. Even if your home is not in a flood hazard area, you should consider buying flood insurance.
To buy flood insurance, call a local insurance agent. Most flood insurance policies are through the National Flood Insurance Program (NFIP), although some private insurance companies also offer flood insurance. Local insurance agents sell NFIP flood policies, and they can tell you about the program as well as other flood insurance coverage that might be available. For more information, visit the NFIP website or call 1-800-427-4661.
TWIA flood insurance requirement. Some Gulf Coast residents must buy flood insurance to be eligible for a TWIA policy. The requirement applies to you if:
- you constructed, altered, remodeled, or enlarged your property (to the extent that a certificate of compliance is required) on or after September 1, 2009;
- any part of your property is in flood zones V, VE, or V1-V30 as defined by NFIP; and
- flood coverage is available from NFIP.
Property repairs are excluded from the requirement. Repair is defined as the reconstruction or restoration of a structure that is damaged or deteriorated.
To view flood maps, visit FEMA’s website.
Review the Homeowners, Flood, and Windstorm Policies Comparison to see the differences between homeowners, flood, and wind and hail insurance.
Some insurance companies offer an endorsement to your policy that covers damages caused by earthquakes.
Extra Coverage (Endorsements)
If you want more coverage than the policy offers, you might be able to add an endorsement to your policy for a higher premium.
Some of the most common endorsements expand or increase coverage for jewelry, fine arts, or camera equipment. Other common endorsements provide coverage for damage originally excluded by the policy.
The following are common endorsements you can consider adding to your policy:
- Backup of sewers or drains. Pays for damage caused by sewer or drain backup.
- Damage to foundation or slabs. Pays to repair a foundation or slab up to certain limits.
- Extended or additional dwelling replacement coverage. Pays up to a certain amount if your policy doesn’t pay enough to rebuild your home.
- Law or ordinance coverage. Pays if repair costs are higher because of local building codes or ordinances.
- Mold remediation. Pays for mold remediation up to a certain amount.
- Replacement cost-dwelling. Pays replacement cost after you repair or replace your property.
- Replacement cost-personal property. Pays replacement cost after you repair or replace your property.
- Water damage from a plumbing, heating, or air conditioning system. Pays for sudden and accidental water damage. Most policies don’t provide coverage for continuous and repeated water damage.
Personal Umbrella Liability Insurance
If you want more liability coverage than a homeowners policy provides, you can buy a separate umbrella policy. Make sure the agent or company fully explains the coverage because policies are different for each insurance company.
Rates and coverage vary for each insurance company, so it’s a good idea to shop around. The following tips can help you find the best deal for your money:
- Decide before shopping which coverages and coverage amounts you need.
- Consider higher deductibles. Your deductible is the amount you must pay before the insurance company will pay. Higher deductibles will lower your premium, but remember that you’ll have to pay more out of your own pocket if you have a claim.
- Ask several companies and agents for price quotes because rates vary. When comparing rates, make sure they are for the same coverages. You can view sample rate comparisons on our website at HelpInsure.com. You may also use the Shopping for Home Insurance Company/Policy Comparison Worksheet to help you gather information about companies and the policies they offer.
- Ask your agent whether you qualify for discounts. Insurance companies may offer policy discounts that will lower your premium.
- When getting a price quote or applying for insurance, answer questions truthfully. Wrong information could cause you to get an incorrect price quote or could lead to a denial or cancellation of coverage.
- Consider factors other than price, including an insurance company’s financial rating, complaint index, and license status. The financial rating indicates a company’s financial strength and stability, and the complaint index is an indication of its customer service record. Buy only from licensed insurance companies and agents. It is against the law to sell insurance without a license in Texas. Learn an insurance company’s license status, complaint history, and financial rating from an independent rating organization by calling TDI’s Consumer Help Line at 1-800-252-3439 or by visiting the website.
Review your Policy
After you buy a policy, read it carefully to make sure that everything is correct. Review the following items on the declarations page:
- Your name and the property location.
- Policy period. This is the date the policy is in effect. Your mortgage company or lienholder will use this date to ensure that you have insurance on your property.
- Coverages. This section lists your property and liability coverages and limits. Consider whether your property coverage limits are high enough to replace your house and personal property if they are damaged or destroyed. You can increase property and liability coverages if you don’t think they’re high enough.
- Other coverages or endorsements. Any increases in coverage or additional coverages will be listed here.
- Deductibles. The deductible is listed as a dollar amount and a percentage for each type of coverage. The deductible is the amount you must pay before the insurance company will pay. For example, if you have a claim for $1,000 and a deductible of $300, the insurance company will automatically deduct $300 from the amount it will pay you.
- Discounts. All the discounts you’re receiving will be listed. Ask your company if there’s a discount you think you should be getting.
- Policy premium. This is the cost of your policy after your discounts.
- Rating information. This section describes what factors your insurance company used to decide on your premium.
- Mortgagee. Make sure the name and address of your mortgagee are correct.
Insurance companies file their rates with TDI but don’t need approval before using them. This system is called file and use. Texas law requires insurance companies to offer rates that are reasonable, adequate, not excessive to the risks for which they apply, and not unfairly discriminatory. If TDI determines that an insurance company’s rates don’t meet these requirements, we may require the company to pay refunds to the policyholders it overcharged. Insurance companies may appeal TDI’s decisions.
Factors that Affect Your Premium
Insurance companies use a process called underwriting to decide whether to sell you a policy and what rate to charge you. Each company must file its underwriting guidelines with TDI and send us updates if the guidelines change. Companies use various factors to determine premiums. These include:
- Your home’s age and condition. Companies may refuse to insure homes in poor condition, but they may not deny coverage solely because of a home’s age or value. However, most companies will charge you more if you are insuring an older house.
- Your home’s replacement cost. If you have a replacement cost policy, your policy will pay to rebuild your home if it’s destroyed. Your premiums will increase in relation to the amount of your replacement cost.
- Construction materials used in your home. Homes built primarily of brick are less expensive to insure than frame homes.
- Where you live. Premiums will likely be higher in areas with a higher crime or high storm activity.
- Availability of local fire protection. Premiums are usually lower for homes in areas with access to good fire protection.
- Your claims history. Companies use your claims history to determine what to charge you for your coverage. Your claims history includes both the type and the number of claims filed.
- Your credit score. Companies may consider your credit score when deciding whether to sell you a policy and what to charge you. However, a company can’t refuse to sell you a policy or cancel or nonrenew your policy solely because of your credit score. Companies that use credit scoring must file their credit scoring models with TDI. It’s a good idea to look at your credit report each year and correct any errors. For more information about credit scoring, visit TDI’s Credit Scoring and Insurance web page.
Discounts can help you save money on your insurance. Most companies offer premium discounts if you reduce the chances of a loss. Each company sets the amount of the discounts it offers. You might be able to get a discount for:
- having an alarm system;
- having fire extinguishers, fire alarms, or a sprinkler system;
- having a newer home or a home in good condition;
- having other policies with the same insurance company or group;
- being over 65; and
- being claim free for three years in a row.
If you are having trouble finding a homeowners policy, it might help to take steps to reduce your chances of a loss. Here are some things you can do:
Remove Potential Risks
You can make your home more insurable by taking care of the things that insurance companies and agents see as signs of potential risk. Look around your house 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.
Take Precautions against Crime
Since theft is a common cause of homeowners claims, some insurance companies might not be willing to insure homes that seem vulnerable to crime. Here are some things you can do to help you protect yourself and your property:
- Call the crime prevention officers of your local police department. They can inspect your home and tell you how to better protect 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 can give you some information to get started.
- Install a burglar alarm that calls the police or a security company.
- Eliminate hiding places for thieves and vandals. Keep trees and shrubs trimmed, especially around windows and entryways.
- Don’t park cars on the street. Cars parked on the street are tempting targets for thieves and vandals and, like overgrown shrubs, can be hiding places.
- Turn on outside lights at night.
- Write an identification number on your personal property to help identify it if it’s stolen.
Keep Your House and Yard in Good Condition
Someone from the insurance company will inspect your home when you apply for insurance. A cluttered yard and faded paint could suggest an unsafe home or existing damage. Insurance companies may charge you a higher premium, restrict or limit your coverage, or even refuse to insure you based on the company’s inspection. Take the following steps to improve your home’s safety and appearance:
- Fix any damage, such as rotting boards, sagging screens, or a loose front door.
- Remove anything from your property that could easily cause an accident.
- Replace a damaged or worn roof.
- Keep your yard and landscaping clean and trim.
- Repaint if your paint is peeling or faded.
Other Options for Insuring Your Home
If you have trouble finding insurance for your home, the following programs may be able to help:
HelpInsure.com is a free and secure service of TDI and the Office of Public Insurance Counsel to help Texans shop for homeowners, condo, renters, and automobile insurance. You can:
- view sample rates for companies selling insurance in your area;
- learn more about policy coverages;
- learn an insurance company’s complaint index, financial rating, loss ratio, and market share; and
- learn how companies use credit scores and what discounts they offer.
For more information or to sign up, visit HelpInsure.com or call the Consumer Help Line at 1-800-252-3439.
Texas FAIR Plan Association
The Texas FAIR Plan Association provides basic homeowners insurance to eligible consumers. To be eligible for coverage, you must have been denied insurance by at least two licensed insurance companies writing residential property insurance in Texas and may not have received a valid offer of comparable insurance from a company licensed in Texas.
For more information, contact your agent or the Texas FAIR Plan at 1-800-979-6440.
Surplus Lines Carriers
If you’re still unable to find insurance, your last resort might be to get insurance from a surplus lines carrier. Surplus lines carriers are out-of-state companies not licensed in Texas, but legally eligible to sell insurance to insure risks that companies in the standard market are unwilling to insure. Surplus lines carriers usually charge more than licensed companies and offer less coverage.
Surplus lines carriers aren’t members of a guaranty association. This means that your claims might go unpaid if the surplus lines carrier becomes unable to pay its claims.
Agents must make a good effort to find coverage with a licensed company before offering you a surplus lines policy. Ask which licensed companies turned you down, and why. Companies must tell you why they turned you down.
Knowing your rights can help if 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. You may complain to TDI if you think a company improperly denied, canceled, or nonrenewed your policy.
Many insurance companies use the Comprehensive Loss Underwriting Exchange (CLUE) to review your claims history. CLUE reports list the property insurance claims history of people and houses, regardless of who owned them, for the last seven years.
Companies are only allowed to report information if someone filed a claim. Federal law gives you the right to challenge wrong information. If an insurance company based part of its decision to deny you coverage on a CLUE report, you can get a free copy of the report by calling LexisNexis Personal Reports at 1-866-527-2600 or by visiting the LexisNexis website.
Before calling, get the CLUE reference number from the insurance company’s denial letter or from the company. Using the reference number will speed the process by making sure you are requesting the right report. CLUE is a registered trademark of Equifax Inc.
Cancellation and Nonrenewal
Cancellation means either you or the insurance company stops coverage before your policy’s normal expiration date. If either you or the company cancels your policy, the company must refund any unearned premium. Unearned premium is the amount you paid in advance that didn’t buy coverage. For example, if you paid an annual premium of $600 and you cancel your policy after one month, the company owes you $550 in unearned premium.
A company must give you 10 days’ notice before it cancels your policy.
A company may cancel your policy within the first 60 days:
- for an increased risk that wasn’t disclosed on the application and isn’t the subject of a prior claim, or
- if the company doesn’t accept a copy of a required inspection report before the effective date of the policy.
An insurance company may cancel your policy anytime for the following reasons:
- nonpayment of premium,
- filing a fraudulent claim,
- if continuation of the policy violates the law, or
- an increase in hazard that’s within your control that would increase the premium rate of the policy.
Nonrenewal means a company refuses to renew your policy when it expires. A company must give you written notice at least 30 days before your policy’s expiration date if it plans to nonrenew your policy or change your coverages. If the company doesn’t notify you in writing in the required time, it must renew the policy at your request.
A company may nonrenew your policy if your property is in bad condition. It may also require you to make repairs to your home before renewing your policy. Generally, companies will give you six months to a year to make repairs. If the repairs are needed because of a storm or other covered loss, the company must pay for the work (minus your deductible). If the repairs are required because of deterioration or normal wear and tear – a worn-out roof, for instance – you are responsible for paying.
An insurance company may also nonrenew your policy if you file three or more nonweather-related claims in three years. If your company doesn’t notify you after a second nonweather-related claim, it can’t refuse to renew your policy because of a third claim. A company can’t use the first two appliance-related claims to determine the number of nonweather-related claims for the purposes of nonrenewing your policy.
A company may not nonrenew your policy if you file a claim for a loss your policy doesn’t cover. Instead of nonrenewal, the company can charge an added premium called a surcharge. In addition, a company can add a surcharge for filing two or more nonweather-related claims in the previous policy year.
If you move out of your house and it remains vacant for 60 days or longer, most policies automatically stop coverage. The policy’s liability coverages will continue, however. The vacancy also could cause the company to refuse to renew the policy when it expires.
Your Rights against Unfair Discrimination
Insurance companies may not:
- Deny, refuse to renew, limit, or charge more for coverage because of your race, color, religion, or national origin.
- 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 evidence that your home presents a greater risk for a loss than other homes it is willing to insure.
- Unfairly discriminate between people 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.”
- Refuse to insure a home based only on its age or low value. Companies may offer discounts for newer homes.
Texas law sets deadlines for insurance companies to act after you’ve filed a claim. Your company must:
- Acknowledge your claim within 15 days of receiving it. The company may ask you for more information to investigate your claim.
- Accept or reject your claim within 15 business days of getting all the information it needs from you. If the company rejects your claim, it must tell you why in writing. The deadline may be longer after large disasters.
- Send your check or bank draft within five business days after it agrees to pay your claim.
- 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.
- Surplus lines carriers have 20 business days to pay your claim after agreeing to do so.
- If your insurance company doesn’t comply with the deadlines to pay your claim, you have the right to sue the company for the amount of the claim, interest on the amount of the claim, and attorney’s fees.
- If your property damage was caused by a natural disaster—such as a hurricane, flood, tornado, or wildfire—you must give written notice to the company at least 61 days before filing suit. There is an exception if you don’t have enough time due to the statute of limitations to file a claim. The amount of simple interest you can collect will be lower for damages caused by natural disasters and the attorney’s fees you can collect must be considered “reasonable and necessary.”
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 10 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 or on the Attorney General’s website.
To make the claim process run smoothly and to protect your rights, follow these steps:
- Know your coverage. Your policy’s dollar limits, coverages, deductibles, endorsements, and exclusions appear on your policy’s declarations page. If you need help, ask your agent or insurance company representative. If you have a loss, tell your agent or insurance company as soon as possible. Also report losses involving theft or crime to the police.
- Make a list of your damaged property. If possible, take pictures or video of the damage before making any repairs.
- 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. Your policy will cover the cost of these repairs and for storing personal belongings. It is important to only make temporary repairs.
- 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.
- Try to be there when the insurance company’s adjuster inspects your home. You may have your contractor or builder with you. Your contractor or builder may discuss estimates or technical specifications with the adjuster or your insurance company.
- 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.
Proof of loss. Within 15 days after you report your loss, the insurance company may request a signed, notarized proof of loss form. The company will use the form to decide the value of your claim. In most cases, the company will ask you to estimate the replacement cost of any damaged or lost personal property and the cost of repairing your home.
Use these tips when determining your estimate:
- Make your list as complete and detailed as possible.
- Talk to local contractors or retailers to get pricing information.
- Include sales tax in your cost estimates.
- Ask whether you should use exact costs or round numbers to the nearest dollar.
- Include small items such as kitchen utensils or clothing accessories.
- Include photos and receipts.
- Keep a copy of the estimate and any supporting documents for your records.
The adjuster will prepare a final estimate of the cost to repair your home, and repair or replace any personal belongings. The insurance company’s offer is based on this estimate.
Disputes. If you disagree with the adjuster’s final estimate, tell the insurance company why. The company might have overlooked something and may make adjustments. If you still disagree, you can use the appraisal process or hire a public insurance adjuster.
Appraisal. The appraisal process is only available in disputes regarding the amount of your claim. It can’t be used for settling disputes about whether the damage is covered by the policy.
The appraisal process begins with you and the insurance company each hiring an appraiser. The two appraisers then choose a third appraiser as the umpire. Your appraiser and the company’s appraiser make their own estimates of your loss. If they are different, the umpire makes the final decision, which is binding on both you and the insurance company. You are responsible for the expenses of the appraiser you hire and for half of the umpire’s expenses.
Adjusters. The person you deal with most often during a claim will probably be an adjuster. There are several types of adjusters.
- Company adjusters are full-time employees of the insurance company.
- Independent adjusters are independent contractors who provide claims services to insurance companies. They usually charge the insurance company a fee for each claim they handle.
- Public insurance adjusters are independent adjusters who help people negotiate claims with their insurance companies. Public adjusters work for you, not the insurance company.
Public insurance adjusters charge fees for their services. Before you hire a public insurance adjuster, make sure you understand what you’ll have to pay.
Public adjusters aren’t allowed to give legal advice or participate in the reconstruction or repair of your damaged property. They also aren’t allowed to engage in any activity that would be a conflict of interest.
A public adjuster must be licensed by TDI. To learn whether a public adjuster is licensed, call TDI’s Consumer Help Line or use the Agent Lookup feature on our website.
Payment. Once the company agrees to pay all or part of your claim, it must pay within five business days. If you don’t get your check within five business days, contact your agent or company. If you think the company is delaying payment on purpose, contact TDI for help.
Most companies pay homeowners claims with two checks. The first is issued after the adjuster looks at your loss and is for the estimated cost of repairs, minus depreciation and your deductible. The company will issue the second check for the rest of your claim after it receives the contractor’s 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.
Note: TWIA policies issued or renewed after September 27, 2011, don’t have the same claims deadlines as other homeowners policies. If you have a TWIA policy, read your policy or talk to your agent to understand the claims process.
Additional living expenses (ALE). Your insurance company might pay your additional living expenses (temporary housing, food, and other essentials) if you have to move from your home while repairs are made.
Ask your agent or insurance company if your policy includes ALE. If it does, you might be able to get an advance ALE payment to help you move. Most policies pay up to 10 to 20 percent of the amount of the dwelling coverage on your house for ALE.
Your insurance company will only pay for ALE up to your policy’s ALE dollar limits. Because repairs on your home can sometimes take months, you should monitor your expenses carefully to ensure that you have enough ALE to cover the entire time you will be out of your home. If you reach your policy’s ALE dollar limits before your home is fully repaired, you’ll have to pay the rest of the expenses out of your own pocket.
Companies may be penalized if they don’t settle claims fairly and on time. If you think an insurance company has treated you unfairly, first contact the company and try to resolve the problem. Most companies are required to have a toll-free telephone line to provide customer assistance. The number should be listed in your policy.
If you’re unable to resolve the problem yourself, contact TDI to file a complaint. There are two ways to file a complaint:
- You can use the Online Complaint Portal.
- You can also fill out a complaint form on the portal page or call the Consumer Help Line to get a complaint form mailed to you.
For insurance questions or for help with an insurance-related complaint, call the TDI Consumer Help Line at 1-800-252-3439 or visit our website.
The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.
Source: The Texas Department of Insurance – (September 2017)
A Closing Word from Instant Insurance Quotes Online
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