Understanding Texas Homeowner’s InsuranceJune 7, 2011
The Amaro Law Firm believes Texans should be informed about some basic aspects of Texas homeowner’s insurance in order to protect their homes in the event of natural disasters such as floods, fires, hurricanes, hail storms, and tornados. These types of occurrences can cause significant losses to Texans which may be recoverable under certain insurance policies.
The purpose of homeowner’s insurance is to relieve Texans from the uncertainty of not being able to carry the financial burdens which accompany certain types of damage to their homes. However, overlooking certain aspects of the insurance policy could end up costing the homeowner thousands of dollars.
Texas is a part of a strip of land known as “Tornado Alley” which has more tornadoes than any other state in the union. Reportedly, Texas also incurs more property damages from tornadoes than any other state in the union. According to reports, tornadoes have caused well over 2.5 billion dollars of property damage in Texas since 1950.
Because Texas is adjacent to the Gulf of Mexico, Texas homes near the gulf are also exposed to the possibility of hurricane damage. Reportedly, Hurricane Ike, the most recent storm to hit the gulf of Texas, caused over 19.3 billion dollars in property damage.
Texans should always read the entire insurance policy before purchasing it, as homeowner’s insurance policies often offer or leave out a variety of different coverages with various exclusions and/or endorsements. However, the sad reality is that many Texans don’t realize the true extent of their homeowner’s insurance policies until their home is damaged and it’s too late.
Ideally, Texans should purchase a homeowner’s insurance which contains a large enough policy limits to replace their home, contents, and provide adequate alternative living expenses while their homes are replaced or rebuilt. Typically, homeowners consider must familiarize themselves with terms such as “appraised value” or “market value.” However, when it comes to homeowner’s insurance, Texan’s should focus on what is known as “replacement value.” The replacement value is how much it would cost to rebuild the home today. Replacement value is different from appraised or market value because it considers the cost of building the home from square one. Reportedly, one of the most common problems with weather related damage to homes is that the owners simply did not purchase enough insurance coverage.
Texans should also check the section on “wind storm protection” in order to look for specific coverage protections. Texans should ask the insurance agent to explain the full aspects of the protection as often times a specific flood policy might be needed for homes susceptible to hurricanes and flood damages. Even then, homeowners should ask if the policy provides specific flood protection and ask their agent what exactly “wind driven” rain means.
This is important because it’s possible for homeowners to have flood coverage and not have flood content coverage, which protects the items inside the house. Texans should also take an inventory of the items in their homes because in order to replace the contents of the home they must know everything in it. A good way for Texans to take a home inventory is to make a home video of the homes’ contents both outside and inside and store the video somewhere offsite like a safety deposit box. Texans should also keep receipts of expensive items in order to prove their worth.
If you have any questions about the extent of your insurance coverage for a claim resulting from hurricane, flood, hail, fire, tornado, or other damages, please do not hesitate to contact us for a free and private consultation.