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Deciding How Much Homeowners Insurance Coverage You Need in Texas

One of the most common questions people ask when purchasing a new homeowners insurance policy relates to how much coverage they need. Being under-insured with homeowners insurance is not something that you want to do as it could result in the financial loss of thousands or even tens of thousands of dollars or more in some cases. With a closer look at a few helpful tips, you can make a more informed decision about the homeowners insurance coverage that you need.

The Replacement Value of the Home

When you purchase a homeowners insurance policy online after comparing rates somewhere like, it is important to think about worst case scenarios. A worst case scenario will be the total loss of the home and everything inside of it. In Texas, this could happen from a hurricane along the coast, a tornado, a flood, a fire or another similar type of event. With a total loss event, you will need to pay to rebuild the entire home from the ground up, and no aspect of the structure of the home may be salvageable. Therefore, homeowners insurance ideally will have adequate coverage to rebuild the entire home as-is today. This figure is often provided on your appraisal, but you can get more information by speaking with a builder or real estate agent.

No Need to Insure the Land

Bear in mind that the replacement value of the home is not the full sales price or the appraised value. This is because both of these figures include value for the land as well as the developed features or structures on the property. There is no event that would result in financial loss related to the land. For example, even if a fire destroyed the home entirely, you would not need to replace the land. With this in mind, there is no need to insure the land, but coverage should be adequate to replace the home and its contents.

The Value of the Home’s Contents

Valuing the contents of a home can be difficult to do, and many people estimate on the lower end. Think about how much the cost of a new television, refrigerator, washer and dryer would cost. Consider how much it would cost you to replace the wardrobe of a single person in your home or to purchase new living room furniture. These figures can add up. A smart idea is to walk through the home room by room, creating an inventory of the items you own with a list and photographs to corroborate ownership. This may be needed if you file a claim. Then, estimate the cost to replace each item in the room. While this can take time, it can be very helpful if you need to file a homeowners insurance claim in the future.

Special Coverage Options

With your homeowners insurance policy, you may have the option to include special options. For example, most homeowners insurance policies in Texas do not cover black mold growth losses, but you can purchase this coverage option. Some do not include water loss damages, but you may purchase it. If your home is in a designated flood plain, you may need to purchase flood coverage for your homeowners insurance policy. In addition, you may practically want to have a clause in your homeowners insurance policy from Texas Quotes that will pay for you to be displaced from home, such as if you need to rent another home or stay in a hotel for a few weeks or months while your home is being repaired or being rebuilt.

Being under-insured with your homeowners insurance policy could be financially disastrous, but each of these points can help you to reduce the likelihood that you are under-insured. If you need help estimating coverage for your homeowners insurance, consider requesting assistance from your homeowners insurance agent.