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Paying for Texas Homeowners Insurance

Typically, you can pay for homeowners insurance policy in Texas through any of the following means:

  • A credit card (Master Card, American Express, Visa Card, or Discover Card)

  • Money order

  • Personal or Cashier’s Check

  • Cash

  • An escrow account

  • Premium financing

Who Pays for Homeowners Insurance?

In Texas, homeowners insurance is paid by the owner of the insured property. Typically, if you purchased your home through a mortgage, your lender will require that you have homeowners insurance coverage. In that case, your premium can be paid through an escrow account maintained by your mortgage lender. However, the escrow account will be funded by you based on the anticipated insurance costs during the next billing cycle.

If the owner of the home loses homeowners coverage while the home is financed, the lending bank will acquire insurance for the property through its own channels at its own negotiated rates and will bill the homeowner for this coverage until they are able to acquire coverage of their own.

What are the Payment Options for Homeowners Insurance?

The most popular payment options available for homeowners insurance in Texas are the monthly and annual payment options. You can make these payments using your credit card (Master Card, American Express, Visa Card, or Discover Card), money order, cash or check, or through an escrow account. You can also opt for autopay. Autopay is a more preferred payment option by many Texas insurers. It allows you to set up a payment plan for a specific date that automatically sweeps premium to your insurer on the selected date. Autopay helps the insured to solve a common challenge; premium payments are never missed.

Can I Finance Homeowners Insurance Cost?

Yes, you can finance homeowners insurance premiums in Texas. Usually, the insurance company will give you the option to pay for your coverage fully in a lump sum (annual) or split it into smaller chunks to be paid monthly. If you are using escrow to pay - you are paying annually.

Is Premium Financing Available for Homeowners Insurance?

Yes, premium financing is available for homeowners insurance in Texas. Apart from the option of annual bulk payment, insurers also offer monthly payment options to their clients. In most cases, the monthly payment attracts extra costs charged by the insurance company or the third-party company that financed the premium payment.

The extra charge by the insurance company typically comes in the form of an administrative fee charged to cover the human and material costs of generating and processing the monthly premium payments. The fee is charged at the flat rate of $5 to $10 per month and paid by each client, in addition to the actual monthly premium.

Unlike commercial insurance, where the premium can be paid in full or through premium financing, homeowners insurance typically does not require the use of the third party premium finance. Texas insurers give the insured residents more flexibility on the choice of payments without having to resort to premium finance.

How Does Premium Financing Work in Homeowners Insurance?

In Texas, homeowners premium financing is typically carried out internally by the insurer, frequently with little to no extra cost to the insured.

If the insured homeowner chooses to use outside premium financing solutions, it can be done through a licensed premium financing company, as specified in Section 651 of the Texas Insurance Code. Premium financing enables you to secure a loan from a financing company to pay up your insurance premium upfront and repay periodically at an agreed interest rate. The Texas Department of Insurance (TDI) provides a list of accredited 3rd party premium finance companies in the state.

You should speak with a knowledgeable licensed Texas P&C insurance agent to explain how premium financing works, discuss the potential risks involved, make recommendations about financing companies and help you negotiate the best interest rates.

How is Premium Finance Different from Other Payment Methods for Homeowners Insurance?

Premium financing is different from other payment methods for homeowners insurance because it is a loan offered by a third-party financing company, and it comes with interest. This makes it more expensive than other payment methods. However, in some situations, premium financing may be a more convenient method of paying for homeowners insurance premiums in Texas.

How Often is Homeowners Insurance Paid?

Homeowners insurance premiums in Texas can be paid annually, bi-annually, quarterly, or monthly. While payment options vary from one insurer to another, many insurance companies in the state allow all these payment options. So, be sure to note the method stipulated in your homeowners insurance policy contract to avoid a policy lapse.

Is Homeowners Insurance Paid Monthly or Yearly?

Homeowners insurance premiums can be paid monthly or annually in Texas. Most insurance companies allow both options of payment, but they offer discounts and other incentives to persons who choose the annual payment option as it helps to save on insurance costs.

Can Homeowners Insurance Premiums be Paid Annually?

Yes, paying your homeowners insurance premium annually in Texas can help you save on insurance costs. This is because most insurers give discounts and other incentives which help to save on premium costs.

Can New Homeowners Insurance Cover Old Bills?

No, in Texas a new homeowners insurance policy cannot cover old bills. When you switch to a new home insurance policy, your old bills will not be settled by the new policy provider. All bills must be settled by the policy that was in force when the event occurred. However, in the case of an overlapping policy, the two are categorized as primary and secondary policies, where the secondary policy takes care of what the primary policy could not cover. Speaking with a Texas-licensed P&C agent will clarify the intricacies involved for you, so it is advised.

How Do I Send my Homeowners Insurance Bill?

You may send your homeowners insurance bills through the mail, automated bank withdrawal, online, over the phone, and through your mortgage company.

  • Mail - You can mail your premium payment as a paper check to the insurance company. Ensure that it is duly signed

  • Mortgage company - This is done through an escrow account managed by your mortgage company. You are responsible for funding this account

  • Automated bank withdrawal - In this case, payment is made through a scheduled bank transfer as an automated payment. Since it is automated, you will not have to worry about missing the premium due date

In most cases, if the physical version of the bill and its payment stub do not have to be mailed with the payment, the insured homeowners may also pay their bills by calling in the payment to the payment department or paying the bill through the insurer’s online portal.

Do I Pay Taxes on Homeowners Insurance?

No, you do not pay taxes when you purchase Homeowners insurance in Texas.

Insured homeowners do not pay sales taxes on insurance because it is the insurer who pays its portion of the income they collected from them as a sales tax to the state. As a homeowners insurance policyholder, you may only pay the cost of your insurance, administrative charges, and the cost of financing your premium if that applies to you. Talk to a licensed agent for a better understanding of tax-related matters on homeowners insurance.

Is Homeowners Insurance Premium Tax Deductible?

In Texas, a homeowners insurance premium is generally non-tax deductible. However, if you use your property for commercial purposes or run a home office within the property, then your premium may be tax-deductible. Consult with a Texas-licensed tax professional for in-depth knowledge of how tax deductions work in relation to homeowners insurance.

Can you Pay Homeowners Insurance Late?

Yes, as long as it is paid within the grace period offered by your homeowners insurer as stipulated in your policy contract. Texas insurance companies usually offer a grace period for payment after the premium’s due date has elapsed. As such, you can make a late payment without paying penalties and still maintain coverage. However, it is advisable to pay your premium before the grace period elapses to avoid losing coverage. Your insurer reserves the right to cancel your plan once the grace period is over.

Does Homeowners Insurance Have a Grace Period?

Yes, it does. In Texas, most homeowners insurance policies have a grace period of 10 to 30 days, depending on the insurer. Your insurer is required to spell out this provision in your initial policy contract.

What is a Grace Period in Homeowners Insurance?

A grace period in homeowners insurance is the time frame you are given to pay your premium after the due date has elapsed. This is the only period your premium can be delayed without paying any penalty. The grace period protects insureds from forfeiting their coverage as a result of late premium payment.

Is There a Grace Period for Homeowners Insurance after Termination?

No. In Texas, after your homeowners insurance policy has been terminated due to failure to pay your premium, your only option is to re-apply for new coverage or reinstate your insurance policy. You should speak with an experienced licensed P&C agent for assistance if you intend to reinstate a lapsed homeowners policy.

What to Do if you Can’t Pay for Homeowners Insurance?

You may be unable to pay for your home insurance for several reasons. If the premium is too high for you, you may apply for a more affordable plan with your current insurer or a new insurance provider. Once you have the new more affordable homeowners insurance coverage in place, cancel your previous policy. Discuss with a knowledgeable property insurance agent for help. An agent can help you select a plan with a lower premium rate that will still meet your insurance needs. The Texas Fair Plan can also help you find coverage if you’ve been denied coverage by other insurers: (800) 979-6440.

Will my Homeowners Insurance Lapse if I Miss a Payment?

Your homeowners insurance will not lapse immediately if you miss a payment. Whenever you miss a payment, ensure you pay up within the grace period. If you, however, fail to pay before the grace period ends, your policy will lapse and you will lose homeowners insurance coverage. Speak to a Texas-licensed P&C insurance agent for further information on how to avoid late premium payments, prevent a policy lapse, and the resulting gap in coverage.

If you have homeowners insurance questions - alway speak with state-licensed insurance professionals.