Hazard insurance is synonymous with home insurance. It specifically protects the home’s physical structure against covered hazards, or perils. This insurance covers common risks in Texas, like hail, tornadoes, and hurricanes, but it has exclusions that may require supplemental insurance.
Read on to learn how hazard insurance works, if you need it, what it costs, and how to purchase it.12
Your homeowners insurance policy protects you in the event of several covered perils. Here’s a brief look at the types of coverages you’ll find in a standard policy:
Hazard insurance doesn’t cover all perils, so it’s important to read the fine print to determine what your policy does and doesn’t cover. A standard home insurance policy excludes coverage for the following perils:
Floods
Earthquakes
Landslides, sinkholes, and mudslides
Sewer backups and gradual water damage
Mold
Wear and tear
Animal and rodent damage
Later volcanic eruption effects
Foundation settling and cracking
Texas law doesn’t require you to carry hazard insurance, but your lender will generally require it if you have a mortgage on your home. You may also decide to purchase this additional protection even if you don’t have a mortgage on your home.
Homeowners in the Lone Star State experience higher rates of damage due to severe weather events like hailstorms, tornadoes, and hurricanes. If a hazard damages your home and you don’t have insurance, repairing or rebuilding your home could result in tens of thousands of dollars in out-of-pocket costs.
The average cost of home insurance in Texas is $4,140 for $300,000 in dwelling coverage. This is much higher than the national average of $2,532 for the same level of coverage.
But the actual cost of your policy will depend on several factors, including your home’s age, location, replacement cost, deductible, dwelling coverage amount, and more. Insurers also factor in your claims and credit-based insurance score.
Additionally, the insurance company you choose will affect your rates. Insurers calculate premiums differently, and some offer better rates for certain risk factors. The best way to get a competitive rate for your insurance coverage is by comparing quotes from different companies.
The table below shows the average monthly premiums from various insurers in Texas for a home insurance policy with $300,000 of dwelling coverage.
You can get hazard insurance in Texas through private insurance companies like State Farm, Nationwide, Liberty Mutual, and more. Here’s how to find the right home insurance company for you:
Work with an insurance broker or agent. An insurance professional can suggest quality insurance companies that fit your specific needs and budget. If you don’t know your coverage needs, you can ask them for help. Start with the Texas Department of Insurance website and use its search tool to find licensed insurance agents and brokers in your area.
Ask friends and family. If you know other homeowners in your area, you can ask about their experience with certain insurance companies. This may give you recommendations on the best homeowners insurance companies and companies to avoid.
Use online comparison tools. Online comparison tools generate real-time quotes in minutes to help you find the coverages you need at the best price. Answer a few simple questions and you’ll be comparing quotes from several leading insurers in minutes.
Follow these steps to file a hazard insurance claim in Texas:
Prioritize safety. Safety is paramount if a natural disaster, like a hurricane or tornado, strikes your home. Evacuate the area, if necessary, and follow instructions from local officials. Avoid entering damaged buildings until authorities have deemed them safe.
Assess the damage. Once it’s safe to return, walk through your home or the affected areas to evaluate the extent of the damage. Create a list of the damaged items, capturing them with photographs and videos. To prevent damage, leave complex repairs to the professionals. Don’t throw away the damaged items so your insurer can inspect the damages.
File a claim with your insurance company. Start the claims process by notifying your insurer. Most companies have a 24/7 hotline to report emergencies. You can also complete a claims form on your insurer’s website or mobile app.
Meet with the insurance adjuster. Your insurance company may ask you to schedule an appointment with the claims adjuster to inspect the damages and determine your coverage payout. Depending on the extent of the damages, you may also want your contractor or builder present to discuss repair estimates and other specifics with the insurance representative.
Receive your settlement. Your insurer must accept or deny your claim within 15 days of gathering all information. If approved, the insurer must mail a check within five business days of agreeing to pay the claim. Most insurance companies send two separate checks. The first check covers the estimated cost of repairs minus depreciation and your deductible. The second check will cover remaining costs, up to the replacement cost of the items, after your contractors finish the repairs.
Here’s some additional information about hazard insurance in Texas that may help as you’re researching your coverage options.
No. Hazard insurance in Texas doesn’t cover flood damage. Homeowners in designated flood zones must purchase a supplemental policy from the NFIP or the private market. If you already have an insurance policy, ask your current insurer about its flood policies.
Most lenders require hazard insurance if you have an outstanding mortgage. If you have an escrow account, your monthly mortgage payment typically includes your home insurance premium.
Texas doesn’t mandate homeowners to buy hazard insurance, but if you have a mortgage, your lender may require it. Even if you don’t have a mortgage, you should still carry insurance to protect your investment.
You don’t need hazard insurance if you rent your home. Instead, your landlord should have insurance on the structure and foundation of the building. Renters insurance helps renters protect their personal belongings.
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