Homeowners in Texas need to ensure that they have comprehensive protection for their homes in the event of any loss. One way to do this is to purchase dwelling coverage as part of a homeowners insurance policy. Dwelling coverage will pay to replace or repair the physical structure of your home or any attached structures, such as a garage or deck if it were to be damaged.
Here’s what you need to know about dwelling coverage before you shop for a policy from different homeowner insurance companies.
What is Dwelling Coverage?
The question we hear most often from homeowners in Laredo, Texas: “What is dwelling coverage?” Dwelling coverage has the highest insurance limit on a homeowners policy. This coverage will pay to rebuild your home in the event of a disaster.
What Kind of Home Damage is Covered By Dwelling Insurance?
Dwelling coverage protects all structural components plus anything permanently attached to your home from damage. That includes:
- The main structure of your home, such as the foundation, walls, floors, windows, and roof
- Other structures attached to your home, like a garage or deck
- In-ground swimming pools
- Your personal belongings inside of your homes like furniture, clothes, and electronics
- Plumbing, Electrical, and HVAC systems
What Kind of Home Damage is NOT Covered by Dwelling Insurance?
Although it may be covered under a different insurance policy, such as personal property, certain damages are not typically covered by a dwelling insurance policy. These include-
- Detached garages
- Outdoor property, such as a fence, shed, or a treehouse
- Above ground swimming pools
Types of Hazards Covered by Dwelling Insurance
When we think of the damage covered by dwelling insurance, we mostly think of fire, storms, or a tornado. But there are many other hazards included in your dwelling insurance policy. These coverages include-
- Wind and Hail
- Lightning
- Tornadoes
- Riots and Civil Unrest
- Explosions
- Vehicle Impact
- Falling objects that include trees or an aircraft
- Weight of ice, snow, or sleet
- Water damage from plumbing leaks, seepage, or backup of sewers and drains
- Fire and Smoke damage
- Weight of ice and snow
- Sinkholes
- Theft
The dwelling hazard coverage has two different types of policies. These include open perils and named perils.
In an open peril or HO-3 policy, all hazards are covered except those expressly excluded. For example, if a fire damages your home in Lubbock, but the cause of the fire is not listed as an excluded peril, then your dwelling coverage will pay to repair or rebuild your home.
In a named peril or HO-2 policy, only the hazards listed explicitly in the policy are covered. So, if a fire damages your home, but the cause of the fire is not listed as a covered peril, then your Beaumont dwelling coverage will not pay to repair or rebuild your home.
Named perils policies are generally less standard than open perils policies.
Types of Hazards NOT Covered by Dwelling Insurance
While dwelling insurance protects your home from most hazards, there are some that it does not. The most common exclusions are-
- Floods
- Earthquakes
- Landslides
- Sinkholes (in some states)
- Wear and Tear
- Termites and other insects or vermin
How Much Dwelling Coverage Do You Need?
Every homeowner wonders how much dwelling coverage they will need if their home is destroyed due to an unexpected disaster.
However, to calculate a quick estimate, you should call a local building contractor to find the current cost per square foot to rebuild your home. Once you have that number, multiply it by the square footage of your home to get an approx dwelling insurance coverage limit.
Even with a well-calculated estimate, your dwelling coverage may fall short if you have not considered inflation. For example, in Victoria, Texas, construction costs typically rise an average of 3-5% every year, so it is important to regularly re-evaluate your dwelling insurance coverage limit and adjust it as needed.
With most homeowners’ policies, you can choose between replacement cost coverage and actual cash value. With replacement cost, you are covered for the total cost of rebuilding, while with actual cash value, you are only reimbursed for the depreciated value of your home and belongings.
For example, if your 5-year-old television is destroyed in a fire, it would be replaced at its current market value, which may be only a fraction of what you paid for it. However, if you have replacement cost coverage, your insurer would reimburse you the total amount it would cost to purchase a new television.
In short, actual cash value coverage considers the cost to replace your belongings minus depreciation, while replacement cost does not consider depreciation.
However, suppose don’t want to worry about having enough dwelling coverage. In this case, you can also purchase guaranteed or extended replacement costs, which, as the name suggests, guarantees that your home will be rebuilt no matter the cost. But, of course, the premium for this type of coverage will be higher.
Factors that Will Impact Rebuilding Costs
Many factors will impact the cost of rebuilding your home entirely. These include-
- The material used for constructing your home
- Number of floors and bathrooms
- Unique features like a fireplace, hardwood floors, or a finished basement
- Type of roof and the roofing material
- Building code updates
- The current cost of built-in-appliances
The current building codes in your area may require more expensive materials or that certain features in your home be updated to meet the new regulation, which may impact the dwelling insurance coverage limit you need.
For example, if your home is destroyed and must be rebuilt, but the current building codes now require a sprinkler system installed in all new homes, your dwelling insurance policy would not cover installing the sprinkler system.
It is crucial to keep in mind that if you make any renovations or improvements to your Odessa home, you should adjust your dwelling insurance policy accordingly; otherwise, you may be underinsured.
How to Buy Dwelling Insurance?
When you are ready to purchase dwelling insurance from a homeowners insurance company in Texas, the best way to get started is by comparison shopping and getting quotes from different insurance providers. Give each insurer the same information to compare the dwelling insurance policies accurately.
As you compare the homeowner insurance quote, pay attention to each insurer’s coverages and limits to see if the policy matches your needs. You may also want to read the reviews of each insurer to get an idea of the company’s customer service and claims process.
So, are you ready to buy dwelling coverage for your home?
Get in touch with TX Insurance Quotes, and our team of experts will help you find the right dwelling insurance policy for your needs and budget. We have been serving homeowners in Texas for years and have the knowledge and experience needed to help you find the best possible coverage. Contact us today to protect your home tomorrow!
