Components of a Home Insurance Policy
A basic Texas homeowners insurance policy provides property and liability protection for your home. Read on for an explanation of the standard components of a house insurance policy.
Property Protection
The property protection portion of a Texas homeowners insurance policy offers several different types of coverage. The first coverage protects your dwelling, meaning your home's structure. For example, if a windstorm damaged your roof, the dwelling coverage of your policy would pay for the damages. Property coverage also protects other structures on your property, such as sheds, garages, etc. The belongings you keep in your house are covered by the personal property coverage of your policy as well. Usually, personal property protection is limited to 50% of your dwelling coverage. For instance, if your home is insured for $200,000, your personal property coverage limit would be $100,000.
Homeowners Liability Coverage
Accidents happen all the time, and lawsuits often ensue as a result. To protect you from potentially costly legal judgments that could jeopardize your assets, Texas homeowners insurance policies also include liability protection. The liability portion of the policy has two components: property damage and personal injury. In other words, your liability coverage kicks in if you are found legally liable for injuring someone or damaging another's property. Your liability coverage will pay for your legal expenses and take care of any damages. When structuring your Texas home insurance policy, it's important to include enough liability protection to cover all of your assets, including savings accounts, vehicles, homes, investments, etc. If you don't have sufficient liability protection, one lawsuit could take everything you have. Some homeowners choose to supplement their Texas house insurance with an umbrella liability policy for added protection.
Additional Coverages
Basic Texas home insurance policies also include loss of use coverage, which pays for the additional living expenses you incur after your home is damaged by a covered event. Covered living expenses might include the cost of meals, housing, and storage for your possessions. Generally, loss of use coverage is limited to 20% of your dwelling coverage. Most Texas homeowners insurance policies also offer medical payments coverage. This coverage pays for the injuries other people sustain on your property. In some cases, the coverage may also apply to injuries you cause away from your property. Usually, this coverage applies regardless of fault. Remember that medical payments coverage only pays for the medical expenses of people who are not in your household, so it is not a substitute for medical insurance.
