Home policy insurance refers to any policy that covers residential property: damage to personal property, personal liability, or legal responsibility for any injuries inflicted and damage to property of others caused by individuals or their families.
The Texas Department of Insurance (TDI) is the regulatory body for insuring home in Texas. TDI issues licenses to property insurance agents and also approves all the rates for home insurance companies that offer coverage in the state.
Here are the top insurers offering home insurance to the residents of Texas:
|Top Insurance Companies Offering Residential Insurance Coverage in Texas
|(in order of average customer satisfaction)
|Average Consumer Satisfaction Rating
|Safeco (American Economy)
|American Bankers (Assurant)
|Texas Farm Bureau
|American Strategic Insurance
|Infinity / Kemper
|Note: Average consumer satisfaction rating is the average aggregate score from multi-user (non-employee) review platforms, such as: ConsumerAffairs, TrustPilot, WalletHub, Google, and others (based on availability).
The various types of home insurance coverage in Texas include but are not limited to dwelling coverage, personal property coverage, other structures coverage, loss of use coverage, personal liability coverage, and medical payments coverage. Residential insurance can be purchased by owners of the property and by their tenants. In 2023:
In 2023, there were nearly 12 million housing units in Texas, with 62% of them owner-occupied and 38% available for rent. Median value of a Texas home in 2023 was over $200,000, with the numbers continuing to go up. According to the Texas A&M Real Estate Research Center, over 51% of home sales in 2021 were in the $200,000 - $399,999 range.
|Texas Residential Market
|Percentage of Market
|Multi-Unit Dwellings (2 units +)
Rural counties tend to have higher percentages of housing units as owner-occupied. For instance, Terrell County has up to 93% of its housing units as owner-occupied. On the other hand, in Kenedy County, which has the highest number of renters in Texas, nearly 77% of its housing units are rental units. While renters are not responsible for insurance on a rental property structure, rental home insurance will cover the renters personal belongings and liabilities, which are not covered by the landlord’s building coverage.
The most common causes for home insurance claims in Texas are:
The Texas Department of Insurance (TDI) regulates insurers and other companies that conduct home insurance business in the state, sets the rates, and provides assistance to Texas-based insurance consumers.
This regulation is necessary considering the growing number of insurance companies as well as insurance-based businesses in the state.
In 2020, Texas had 1,168 Property and Casualty insurance companies offering coverage to the state’s residents. Out of those, 198 were domestic (where the company is domiciled in TX) and 970 were foreign (domiciled in other states or countries). As of mid 2023, there were over 84 thousand state-licensed Property and Casualty insurance agents.
As of 2023, the total amount of direct P&C Insurance premium written in Texas annually is around $64-$65 billion, which is significantly higher than neighboring states like Louisiana, Arkansas, Oklahoma, and New Mexico combined. Nationwide, Texas accounts for the second-largest amount of the P&C direct premiums written, after California. Out of all direct premiums written in the state, around 17% of the total goes toward Residential P&C insurance in Texas.
Additionally, Federal flood coverage accounts for approximately 1% of state P&C and Private home flood insurance account for 0.10% of the total P&C market in Texas.
Residential property insurance in Texas works as a policy that helps insuring the home where insurance holders live, as well as their personal belongings. Home insurance policy may be purchased from Texas-licensed insurance agents and companies licensed by the Texas Department of Insurance (TDI).
HOME COVERAGE VALUATION
All Texas home insurance policies are based on the valuation of the insured property and it is very important to keep the valuation current. Otherwise you risk being underinsured.
The chosen valuation method determines the:
Residential insurance primarily covers 3 things:
There are different types of residential insurance in Texas. The type you need to purchase largely depends on what you want to protect and whether you rent or own the property.
The most common types of residential insurance in Texas are:
Residential insurance in Texas is divided into 2 main types of coverage, based on what it protects:
Furthermore, the coverage is divided based on the ownership of the home and the occupancy status. All these types of Texas home insurance offer both the property and liability aspects of insurance coverage:
HOMEOWNERS insurance is a form of Texas property insurance policy that covers damages from fire, tornadoes, hailstorms, theft, and other incidents that occur in a private residence. Homeowners insurance can be purchased only by the owner of the property, or someone who is paying the mortgage on the insured home, and resides in the home full time. Over 7.5 million Texas homes are occupied by owners and are in need of homeowners insurance.
Most homeowner insurance policies in Texas do not cover damages from external floods, earthquakes, termites, insects, and rodents. They also do not cover damages caused by a continuous water leak and failure on the homeowner's part to carry out routine maintenance on the property.
Most Texas homeowners insurance policies include the following coverages:
CONDO insurance: Texas condo insurance, also referred to as walls in insurance, covers the interior of their condo units from damages caused by theft, smoke, fire, vandalism, and sudden water damage. It also provides personal liability coverage and pays additional living expenses. Most standard condo insurance in Texas does not cover damages due to lack of maintenance, floods, earthquakes, and water backup, unless separate coverage is purchased.
LANDLORD insurance: typically, Texas rental property insurance covers the home and other structures on the property, such as sheds or fences, from damages caused by fire, lightning, wind, hail, and other covered losses. Rental home insurance also provides coverage for items used to service the rented property.
COMMERCIAL PROPERTY insurance: is used to insure property in multi-dwelling units, most commonly apartment complexes. There are around 2 million multi-dwelling units across Texas.
Similarly to homeowners and landlord insurance, commercial property insurance policy protects multi-dwelling buildings and supporting properties damaged by fire, explosions, burst pipes, storms, theft, and vandalism. Additionally, commercial property insurance can pay for some of the lost income if the property is damaged and the tenant had to move out, and pay for personal liability and medical expenses if someone gets hurt on the property. However, most commercial property insurance does not cover damages caused by earthquakes and floods. That requires a separate flood insurance policy and/or earthquake policy to be added.
RENTER insurance: this is also called tenant insurance or home insurance for rented property. Texas renters insurance provides some of the benefits of home insurance but does not cover the dwelling or structure since renters do not own the building they live in. Although renters insurance isn't mandatory in Texas, landlords might require tenants to have it. Most renter insurance protects renter's belongings from theft or damages due to fire, smoke, theft or vandalism, and certain kinds of water damages, but they do not cover losses due to floods. Dependents of homeowners do not need renter insurance. Their parents' homeowners insurance policy will cover their belongings even if they are not living at home. On average, Texas renter insurance typically costs about $20 monthly. Renters insurance typically includes three types of coverage:
Property insurance in Texas is a type of insurance policy that can provide coverage for property owners or renters against damages caused by fire, theft, smoke, wind, hail, and lightning (NOTE: Flood and Earthquake coverage are purchased separately or as add-ons).
The needed residential property insurance varies depending on whether the insured is the owner of the house (and the house is owner-occupied or for rent) or a renter. The coverages needed in either case are as follows:
Liability insurance is a type of insurance policy that protects individuals against claims resulting from injuries and damage to other people or property.
It is important for both owners and renters to have liability coverage. This is because owners' liability insurance would not cover renters whenever they accidentally cause harm to others and vice versa. Owners should consider getting homeowners liability insurance, condo liability insurance, and landlord liability, while renters should get renter liability insurance.
What commonly insured risk would be covered by liability insurance in Texas?
Most commonly insured risks for residential property liability insurance are Bodily injuries, Property damage, and Libel. If the damage or injury is caused to someone on your own or rented property - you may be found liable. Most common residential liability claims come as a result of: slips, trips, and falls, falling trees, dog bites, swimming pools, and injured workers.
The difference between homeowners insurance and condo insurance in Texas is in the amount of property the policies are designed to cover. Homeowners insurance covers damages done to a house and other structures on the property (sheds, fence, etc). In contrast, condo insurance covers damages to the interior of the individuals' unit(s) and their personal belongings. This is the reason why condo insurance is called “walls in insurance”. The structure of the condo building is covered by the Condominium Association’s Master Policy.
It is not mandatory for homeowners to have home insurance coverage in Texas if he home is owned outright. However, lenders will require individuals who owe money on their homes to have it. Although having home insurance is not legally required, it is advisable for homeowners to get their homes insured because it provides financial protection as well as risk coverage for their homes. There are different forms of home insurance coverage that offer various levels of protection depending on the needs of the individuals and the type of residence being insured. Hence, homeowners should do their due diligence to buy the right kind and amount of home insurance for their homes.
As explained earlier, the amount of coverage depends on the valuation of the property, based on either the Replacement Cost or Actual Cash Value (RC vs ACV). RC insurance claim will pay for the replacement cost of the item, while ACV insurance claim depreciates the RC of the property based on its condition, age, and wear and tear.
When making considerations on what home insurance coverage to go for, it should, ideally, be enough to cover the cost of:
To get insurance home quotes, discuss your home property valuation with a Texas-licensed property insurance professional. A knowledgeable agent can help you figure out how much coverage is needed based on your needs.
Over-insurance can occur when individuals buy insurance coverage that exceeds the property's actual value or replacement cost.
For instance, getting $300,000 worth of home insurance for a house with a market value of $200,000 is considered over-insurance, unless construction of this home is expected to cost this much. Ideally, when insuring a home, insurance coverage limits should be able to cover the cost of rebuilding your home from scratch at current construction costs. Anything above that is over-insurance.
If you are renting a home and you over-insure your belongings - you are wasting money by paying too much for your annual premiums. In case of a claim, the insurer will pay only the Actual Cash (Depreciated) Value or the Replacement Cost (full cost) of the damaged or stolen property. You cannot make money on insurance. It is meant to put the insured party back into the same state they were in before the claim.
Speak with a state-licensed home insurance professional for more details.
A residential property can be underinsured, and individuals might not know this until it is too late. Underinsurance occurs when homeowners and renters don't have enough home policy insurance coverage to protect them in the event of incurred property damage on the home or the belongings. Underinsurance can result in homeowners and tenants paying a large part of the replacement or repair construction costs for damaged property out-of-pocket. Underinsurance in Texas home insurance typically comes in two forms;
For example, if your house is insured for $240,000 and at the current construction prices it costs $300,000 to rebuild, if completely destroyed, where do you plan to get the missing $60,000?
On another hand, if your home is insured for $500,000 with a 3% wind and hail roof deductible, and hail damages your roof - your deductible portion of the bill is $15,000. Considering that most roofs in Texas cost $10,000 - $15,000 to replace, your home in this situation is underinsured based on the deductible, because you would be paying for the roof replacement out of pocket. The insurance company will pay only for the damages above the $15,000.
If you rent a home or an apartment and you underestimate the value of your property, if it is damaged or lost, the claim will get paid based on the insured value. The trick is in insuring for the right amount, without over-insuring and under-insuring. This is why you should review the coverage options and amounts with your trusted insurance agent annually.
Here are some tips that could help with maintaining the right amount of home insurance coverage: