Deductibles and dollar limits
If you have a claim, you must meet a deductible.
The deductible is the amount of a claim that you must pay yourself. For example, if you have a $1,000 claim and your policy has a $300 deductible, the insurance company will deduct $300 from your claim amount and pay you $700. You have different deductibles for each type of coverage.
Policies pay only up to their dollar limits.
Each type of coverage has a dollar limit. Make sure you have enough coverage to replace your home and property if you have a total loss. If you don’t have enough coverage, you’ll have to pay the difference yourself. Most companies require that you insure your home for at least 80 percent of its replacement cost. Some companies require that you insure your home for 100 percent of its replacement cost.
The first page of your policy is the declarations page. It contains a summary of your policy, including your coverages, dollar limits, and deductibles.
Coverage for personal property
Homeowners’ policies generally pay a percentage of your home’s coverage limit to repair or replace your furniture, clothing, and other property. For example, let’s say you insure your home for $100,000 and your policy covers your property at 20 percent of that amount. Your personal property would be insured for up to $20,000.
Homeowners’ policies limit what they will pay for items like jewelry and artwork. If you have expensive jewelry, artwork, or other items, talk to your agent about adding more coverage.
Take inventory of the items you have.
Having a complete inventory of your property will help you decide how much coverage you need and simplify the process when filing a claim.
Update your inventory regularly. If you can, please include each item’s purchase date, value, and serial number. This is especially important for expensive items. Take photos or record a video of each room, including closets, storage rooms, and garage. Open drawers and take pictures of what’s inside. Keep inventory and receipts for expensive items in a fireproof safe or elsewhere. Use our Home Inventory Checklist to help you create your inventory.
Other Coverages You Might Need
Your homeowner’s policy may not protect you against some risks. You can purchase a separate policy or add it to your policy if you need more protection.
flood insurance
Homeowners’ policies do not cover damage caused by flooding. To protect yourself from losses caused by flooding, purchase a flood insurance policy from the National Flood Insurance Program (NFIP). If your property is located in a flood hazard area, your lender will require you to carry flood insurance. For more information and to find out if your property is located in a flood hazard zone, visit FloodSmart.gov or call 800-427-4661.
Windstorm and hail insurance on the Gulf Coast
If you live on the Texas coast or in Harris County on Galveston Bay, your homeowner’s policy will not cover wind and hail damage. The Texas Windstorm Insurance Association (TWIA) offers wind and hail coverage for residents of coastal Texas. You can purchase TWIA coverage through local insurance agents. Depending on where you live, you may need flood insurance before TWIA will sell you a policy. You may also need a home inspection by an engineer or storm inspector. For more information, visit twia.org or call 800-788-8247.
Don’t wait until the last minute to buy wind and hail insurance. TWIA will not sell you a policy if there is a hurricane in the Gulf of Mexico.