It’s the most wonderful time of the year!! Unfortunately, it is also a time when fires and theft are the most common in the home. Therefore, reviewing your homeowner’s insurance policy can ease your mind and make sure you are covered appropriately!
If you’ve purchased a home recently, you more than likely have the coverage you need. However, if it’s been two years or more since you assessed your homeowner’s policy, it would be a good idea to take a look.
Another reason to examine your policy is due to the market increase we have had across the Austin area and your home may very well be worth more than what you originally purchased it for and you might need to adjust your replacement cost.
According to the Texas Department of Insurance, when reviewing your policy, you need to make sure the following items are correct:
- 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.
- Discounts. All the discounts you’re receiving will be listed. Ask your insurance 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 they used to decide on your premium.
- Mortgagee. Make sure the name and address of your mortgagee are correct.
Most policies in the state of Texas include the following coverage:
- 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 must 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 homeowner’s policy pays $500 in medical bills, but you may buy up to $5,000 in medical payments coverage.
It’s important to note that most homeowner’s insurance do NOT cover flooding, earthquakes, termites, freezing pipes while home is unoccupied, wind or hail damage, mold or water damage from repetitive and continuous leaks.
Also, make sure that your homeowner’s policy provides the correct coverage for your personal property (furniture, clothing, electronics) at the amount you need because many policies have caps and won’t cover expensive paintings or jewelry unless you specifically pay for additional coverage for them. Be sure to discuss this with your insurance agent.
For more information on homeowner’s insurance in Texas, please go to Texas Department of Insurance.
We hope you don’t need to use your homeowner’s insurance any time soon, however, if you do we want you to be suitably covered!!
If you or someone you know is interested in buying or selling real estate in the Austin area, please contact Kathleen Bucher at KathleenBucher@mac.com or 512.794.6644. It would be an honor to earn your business!