homeowners insurance

D

dfw75201

250+ Posts
Jeeze, this stuff give me a headache. First time homebuyer here. HO-B, HO-A, HO542.

Each guy thinks his is the way to go.

Any thoughts?

(home is a 1913 woodframe home, new roof at closing, foundation in "very good" condition")

Thanks for any guidance.

Hook 'em
 
I have homeowner's insurance via American Express... very competitive rates and reasonable deductibles.
 
Shop around. It's pretty competetive out there right now. Make sure you get a policy with replacement cost equal to at least 125% of your home's current market value.
 
Also, you will/should get a good size discount on your auto ins. if you go with the same company you use for your house.
 
Thanks guys. What is the best way to determine replacement cost? Is there a site that tells me the average cost on a per foot basis to build a house in Dallas?
 
There is a standard formula used by the insurance industry to calculate replacement cost. It's a function of several things, like # stories, # fireplaces, etc. My replacement cost is estimated at $90/sf. I would think any agent you speak with in the Dallas area could calculate it for you.
 
Yes, but if you calculate on the sale value of the house you are also insuring the lot. If your lot value is say $30K, then are'nt you are paying to insure $30K worth of dirt?
 
if you've done a lot of upgrades on your house, make sure you include that. my condo burned down in january, and our insurance for the structure was only about $5000. that would have been fine for everything else had i not installed new pergo floors throughout. we ended up having to pay an extra $5000 to have the floors re-installed because we had left that out of the original structure.
also, don't scrimp on your contents value - your stuff is probably worth a lot more than you thought. it's best to make an inventory of everything, with photos of the important/expensive stuff, and keep it in a fireproof safe or somewhere besides your home.
having just gone through the fire experience, i have never been so thankful to have good insurance.
 
dfw
The Office of Public Insurance Counsel has an excellent homeowners insurance policy coverage comparison function that will help you make sense of all the new policies available now. Try this link:The Link

As far as including the value of your lot in the amount of insurance you must carry, there is a new law, House Bill 1338, 78th Legislature Regular Session, that prohibits your lender from requiring you to include the value of the land in the amount of insurance you must carry. See Texas Insurance Code, Article 21.48A: The Link
 
Replacement cost and market value are indeed different. Market value is the amount your home would sell for and has little to do with your insurance decision making. Insurance companies use replacement cost calculations to determine the amount your dwelling should be insured for and it can often be higher or lower than the market value. Basically replacement cost is the amount it would cost in your area to rebuild your dwelling in the event of a total loss. Rebuilding costs can differ greatly from new construction costs due to factors such as matching old materials, debris removal, foundation condition, economies of scale, etc. Any decent agent will have replacement cost calculation software and can provide you with those figures. These figures are generally very conservative. Get a few to compare, but there is no reason to insure your home for more than 100% of the replacement cost. Mortgage companies require you to insure your home for at least the loan amount, which in most cases will be lower than the replacement cost.

You will be quoted a package policy that has, for example, an amount equal to 60% of the dwelling coverage for personal property ($100k dwelling - $60k personal property). Be sure that the standard allowances are adequate for your situation or increase them accordingly. Review all endorsements available, such as replacement cost, mold/fungus, and water damage. Not much sense in getting worked up about the replacement cost of your home and then end up with a policy without replacement cost coverage.

The HO-B form was the preferred standard form in Texas for many years and vastly superior to the HO-A form, but it is now hard to find. This is mostly due to mold and water damage claims. Two of the most reputable insurers in the state, USAA and State Farm no longer offer the HO-B, but do offer a much better alternative to the HO-A form. The new forms typically exclude mold damage and water damage, but they can often be added on by endorsement. Texas Select I believe offers a HO-B form, but they have not been around that long. The last policy I saw from Germania, a very small company with a good reputation, was basically an HO-A form without theft coverage that these people thought was the same of the HO-B policy they cancelled. Most likely the agent led them astray and I've seen that happen with many companies.

Consider your automobile insurance in your decision making as many companies offer a multi-line discount, plus dealing with one agent and/or company has its advantages. Don't let pricing take priority over financial stability and claims handling reputation. USAA and State Farm are hard to beat IMO.
 
The following link will give you a list of insurance companies actively writing homeowners insurance and accepting new customers. The list will include information about the policy types offered by each company and contact information. The Link

You can then go to the following link for the Office of public Insurance Counsel for a policy coverage comparison. The Link

Want to avoid insurance companies who use credit reports to decide who they will insure? Try this link: The Link
 
dfw
If you, or anyone else here, have questions about homeowners or auto insurance (or another line of insurance), you should go to the source; Texas Department of Insurance. The Link

For main switchboard call: 800-578-4677
For homeowners insurance, in Austin call: 322-2266
 
AustinTejasFan: That last link is awesome. I love the Home and Car insurance rate guides, especially with the cross-indexing on complaints and financial ratings.
 
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