Texas Homeowners Insurance: What Coverage to Consider
Homeowners insurance in Texas can protect your most valuable asset from natural disaster, accidents, and theft.
But it’s important to understand how a standard homeowners insurance policy works. These policies cover a lot. But there’s also a lot that they don’t cover.
But it’s important to understand how a standard homeowners insurance policy works. These policies cover a lot. But there’s also a lot that they don’t cover.
Living in Texas means that you’re susceptible to hurricanes and floods. Plus, you face other common risks such as damage from fire, lightning, and hail.
The right policy reduces your out-of-pocket expense.
So if you’re looking to get a new policy or upgrade your existing one, here’s what you need to know about homeowners insurance in Texas.
Average Rate for Homeowners Insurance in Texas
If you’re shopping for homeowners insurance in the Lone Star State, you can expect to pay about $3,429 (on average) a year.
Texas is the fifth most expensive state for home insurance.
Yet, rates tend to vary depending on ZIP Code, the replacement cost of a property, coverage options, and square footage.
Average homeowners insurance rates by major TX cities
| City | Average rate |
|---|---|
| Houston | $4,363 |
| Arlington | $3,953 |
| Dallas | $3,876 |
| Fort Worth | $3,739 |
| San Antonio | $2,944 |
| Austin | $2,862 |
| El Paso | $2,361 |
Average Texas homeowners insurance rates by coverage level
| Coverage level ($1,000 deductible) | Average annual rate |
|---|---|
| $200,000 dwelling and $100,000 liability | $2,923 |
| $200,000 dwelling and $300,000 liability | $2,940 |
| $300,000 dwelling and $100,000 liability | $3,412 |
| $300,000 dwelling and $300,000 liability | $3.429 |
| $400,000 dwelling and $100,000 liability | $3,642 |
| $400,000 dwelling and $300,000 liability | $3,648 |
| $500,000 dwelling and $100,000 liability | $4,024 |
| $500,000 dwelling and $300,000 liability | $4,040 |
| $600,000 dwelling and $100,000 liability | $4,267 |
| $600,000 dwelling and $300,000 liability | $4,275 |
Home insurance companies in Texas offer many options to reduce your annual premium.
For example, bundling your insurance can reduce your cost.
Some homeowners buy home insurance with the same company that provides their life insurance and car insurance.
You can also save by choosing a higher insurance deductible. This is the dollar amount you’ll pay out-of-pocket before your insurance carrier pays a claim.
Deductibles start as low as $500. If you select a deductible of $1,000, $2,000, or $2500, you’ll save on insurance premiums.
What is Standard Homeowners Insurance in Texas?
If you own a home, you can’t afford to be without homeowners insurance.
When financing a home through a bank or mortgage company, your lender will require a standard policy.
This not only protects you. It also protects their investment.
Standard policies include four basic protections. But there’s an option to add riders or endorsements.
Riders and endorsements provide bonus coverage to further protect your home.
Four essential protections include:
1. Dwelling coverage
Homeowners insurance policies protect the structure of your home. This protection falls under dwelling coverage.
If a natural disaster or fire destroys or damages the property, dwelling coverage pays to rebuild or repair the home.
As a bonus:
Dwelling coverage also protects detached structures.
Let’s say lightning strikes a detached garage and fire destroys it. In this case, your policy covers the rebuild cost, too.
2. Personal belonging coverage
Of course, you also want to protect your personal belongings within the home.
This includes furniture, electronics, sports equipment, clothes, and other items.
Someone might break into your home and steal your belongings.
Or, a fire or natural disaster might destroy your personal items. Personal property coverage provides peace of mind as you’re able to replace what you’ve lost.
On average, this coverage is about 50 percent to 70 percent of your dwelling coverage.
3. Loss of use
Sometimes, owners can remain in their home during repairs. But in the event of an extensive repair or a rebuild, you might need to live elsewhere.
This includes living in a hotel, or renting a temporary home.
Either way, loss of use coverage (additional living expense coverage) helps cover your temporary living expenses until you’re able to move back into the home.
This coverage is usually 20 percent of your dwelling coverage.
It not only covers your actual housing expense. But also other expenses related to loss of use like restaurant meals.
4. Liability coverage
Unfortunately, there’s the risk of someone being injured on your property. Or, you might unintentionally damage another person’s property.
Liability coverage can provide funds to pay any court-ordered awards, if you’re sued. It also replaces or repairs another person’s property.
If someone becomes injured on your property, this part of your homeowners insurance policy also pays their medical bills.
Average liability coverage starts at $100,000, but there’s an option to increase your limit to $300,000 or more.
You might think about increasing your limit if you have hazards on the property, such as a swimming pool.
Should You Consider Hurricane Insurance?
Hurricane insurance isn’t a separate policy. But most standard homeowners insurance policies do cover hurricane damage.
Just know:
Hurricane insurance policies have their own deductibles.
This is about 1 percent to 5 percent of the home’s insured value.
Although some standard policies provide hurricane protection, you can further protect your home with windstorm insurance. This is especially important if you live in Texas.
Texas is prone to hurricanes.
And unfortunately, some policies issued in the state exclude hurricane protection for certain coastal regions. These policies will refuse to cover wind damage caused by hurricanes, or they’ll limit coverage.
If you have windstorm insurance, though, you’re protected.
Should You Consider Flood Insurance?
Even if your homeowners insurance policy covers hurricane damage, don’t expect it to cover flood damage caused by a hurricane.
In fact:
Standard home insurance policies don’t cover any flooding that originates outside the home.
Some Texas homeowners live in flood-prone communities. If this applies to you, look into buying flood insurance. You can get coverage through the National Flood Insurance Program (NFIP). You need to buy a policy before a hurricane or tropical storm approaches.
Typically, you’re required to have a policy for at least 30 days before you can file a claim.
If you’re interested in getting a flood insurance policy, speak with your insurance provider, too.
You might be able to add a flood rider or endorsement to your existing policy.
Other Coverage to Consider
Along with wind insurance and flood insurance, you can look into adding other riders to protect your property.
Earthquakes
A standard homeowners insurance policy doesn’t cover earthquake damage either.
Earthquakes are rare in the Lone Star State.
Even so, you might add earthquake insurance to your policy—just in case.
Valuable items
A standard homeowners insurance policy also limits coverage on personal property.
Do you have high-ticket valuables in the home like expensive jewelry, artwork, or collectibles?
If so, you can add extra personal property coverage to further protect your belongings in the event of fire, damage, or theft.
Sewer backups
Standard homeowners insurance policies also don’t cover sewer backups.
Adding a water and sewer backup rider protects your property in these situations.
Tips for Shopping for Homeowners Insurance
Here are a few tips for buying homeowners insurance in Texas and getting inexpensive coverage.
1. Compare rates
Some people make the mistake of buying insurance through the first company they contact.
Since insurance rates vary by state, city, and ZIP Code, it’s important to shop around.
There’s no cost to get free rate quotes.
Once you receive your quotes, compare insurance terms, cost, and coverage amounts.
Ideally, you should get quotes from at least three home insurance companies in Texas.
2. Take advantage of discounts
Bundling and increasing your deductible aren’t the only ways to get a discount on your premium.
Insurance carriers also offer discounts if you take steps to protect your home from damage.
For example, you’ll qualify for a lower premium if you install an alarm system, a sprinkler system, a fire alarm, and shatterproof glass.
3. Review your policy
Don’t forget to review your home insurance policy from time to time. Your coverage needs can change. And if you don’t update your policy, you could end up with too much or too little coverage.
Your coverage needs can change. And if you don’t update your policy, you could end up with too much or too little coverage.
You might need to raise your coverage amount if you install a swimming pool. Or if you increase your square footage or buy expensive valuables. Then again, you can reduce your coverage amount if you sell certain valuables.
4. Maintain good credit
Maintaining a good credit history can also reduce your insurance premium.
Some insurance carriers use credit information to determine the cost of your premium.
Homeowners with lower scores often pay more.
Paying your bills on time, disputing credit report errors, and paying down debt are excellent ways to increase your personal score.
Final Word
Homeowners insurance in Texas protects against several scenarios.
In a perfect world, you wouldn’t have to use an insurance policy.
But given the risk of natural disasters like hurricanes and tropical storms—plus the risk of fire and theft—getting a policy with adequate coverage is the best way to protect your asset.
Home insurance companies in Texas offer different solutions based on your needs.
Just make sure you understand what a policy does and doesn’t cover. And if necessary, add riders to your policy to ensure you’re protected against worst-case scenarios.
