Property Insurance

We offer several types of property insurance policies:

Homeowners’ Insurance

Do you have the correct homeowners’ insurance for your home?

When it comes to insuring your home, you can’t afford to take chances. With several different types of homeowners’ insurance, choosing the one that’s right for you can often be complicated and confusing — which is where we come in.

With multiple A-rated companies and a broad knowledge of Texas homeowners insurance, we will provide you with the information needed to select the correct coverage for your home, backed by excellent claims service and competitive rates. The better we know you, the more we can do for you in Frisco TX.

So give us a call today at 972-380-6677, or contact us online so we can get started.

Homeowners’ Insurance Made Easy

Most homeowners’ policies in Texas combine the following five coverages:

  1. Dwelling insurance pays you if your home is damaged or destroyed by a covered loss. It also pays for unattached structures and buildings, such as fences, detached garages and storage sheds.
  2. Personal property insurance pays if the items in your house (such as furniture, clothing and appliances) are stolen, damaged or destroyed by a covered loss.
  3. Liability insurance provides coverage (up to the limits you purchase) if you are sued and found legally responsible for someone else’s injury or property damage. You may be able to purchase up to $1 million in additional coverage.
  4. Medical payments insurance pays the medical bills of people hurt on your property. It may also pay for some injuries that happen away from your home — for example, if your dog bites someone at the park. A basic homeowners’ insurance policy pays $500 in medical bills, but you may buy up to $5,000 in medical payments coverage.
  5. Loss of use insurance pays your additional living expenses (housing, food and other essential expenses) if you are forced to temporarily relocate because of damage to your house from a covered loss. Your policy will pay either a percentage of the amount of your dwelling coverage (typically 10-20%) or for a specific period after the loss (such as 24 months).
There are 2 Types of Homeowners’ Insurance Policies in Texas

All-Risk Policies (a.k.a. comprehensive coverage or open perils coverage)
These policies offer you broad protection and cover all causes of loss except those specifically excluded in the policy.

Named Perils Policies (a.k.a. specified perils coverage)
These policies offer narrower protection than an all-risk policy and cover only the causes of loss specifically named in the policy.

Understanding Replacement Cost & Actual Cash Value

Replacement Cost is what you would pay a contractor to rebuild or repair your home, based on current construction costs. Replacement cost is different from market value and does not include the value of your land. No matter what you paid for your house, or what you think it is worth, the cost to rebuild is based on the current cost of labor and materials at quantity one pricing. The replacement cost of a house can often be a greater number than the market value, or what the house would sell for.

Actual Cash Value is the replacement cost of your property minus depreciation. If your home is destroyed and you only have actual cash value coverage, you may not be able to completely rebuild without funding part of the construction out of your own pocket.

Most Commonly Used Homeowners Policies in Texas

HOA: Basic Named Perils Policy
The HOA Home Policy is the most basic and simple home insurance protection. The HOA policy will only protect you from 10 specific perils. (A peril is an event or disaster that causes a loss or damage to your home or property. A few of the most common perils are fire, theft, wind and hail).

If something happens to your home other than the ten perils found below, you are not covered under the HOA:

  1. Fire or Lightning
  2. Windstorm or Hail
  3. Explosion
  4. Riot or Civil Commotion
  5. Aircraft
  6. Vehicles (unless caused by the insured)
  7. Smoke
  8. Vandalism or Malicious Mischief
  9. Theft
  10. Volcanic Eruption

HOA+: Broad Named Perils Policy
The HOA+ Home Policy provides broader coverage than the standard HOA policy. Like the HOA, the HOA+ still lists every peril you are protected from, but the list adds six more perils.

The 16 listed perils are:

  1. Fire or Lightning
  2. Windstorm or Hail
  3. Explosion
  4. Riot or Civil Commotion
  5. Aircraft
  6. Vehicles
  7. Smoke
  8. Vandalism or Malicious Mischief
  9. Theft
  10. Volcanic Eruption
  11. Falling Objects
  12. Weight of Ice, Snow, or Sleet
  13. Accidental Discharge or Overflow of Water or Stream
  14. Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging
  15. Freezing
  16. Sudden & Accidental Damage from Artificially Generated Electric Current

HOB: Basic Open Perils Policy
The HOB Home Policy is referred to as an open perils policy. That means instead of specifically listing the only perils you are protected from like the HOA or the HOA+, the HOB lists the perils your policy WON’T cover. If a peril isn’t listed as being excluded, your home is protected. The HOB home policy provides protection that is much broader than an HOA or HOA+ policy. It is most similar to the HO3 policy (see HO3, below) but with a slight advantage: An HOB policy typically includes additional water damage protection, such as damage resulting from slow, repeated leakage and sewer backup, which are things that an HO3 doesn’t automatically include.

With the HOB, your home and possessions are protected from the same 16 perils that are listed in the HOA+ policy, as well as all other perils, excluding the following:

  1. Earth Movement
  2. Ordinance or Law (Some Coverage May Be Provided)
  3. Water Damage (Some Coverage May Be Provided)
  4. Power Failure
  5. Neglect
  6. War
  7. Nuclear Hazard
  8. Intentional Loss
  9. Government Action
  10. Mechanical Breakdown
  11. Collapse (Some Coverage May Be Provided)
  12. Mold, Fungus, or Wet Rot (Some Coverage May Be Provided)
  13. Smog, Rust & Corrosion
  14. Smoke from Agricultural Smudging & Industrial Operations
  15. Dispersal, Discharge, Seepage of Pollutants
  16. Animals Own by Insured
  17. Birds, Vermin, Rodents, Insects
  18. Wear & Tear, Deterioration
  19. Settling, Shrinking, Bulging or Expanding (of Bulkheads, Foundations, Pavement, Patios, Footings, Floors, Roofs, Ceilings)

HO3: Basic Open Perils Policy
The HO3 Home Policy is a hybrid of an open perils policy and a named perils policy. Should you have a loss, this policy covers damage to your dwelling, unless the cause of loss is one of the explicitly excluded events listed below. In addition, your personal property will be covered for the same 16 perils covered by the HOA+ policy.

The exclusions to this policy’s dwelling protection are:

  1. Earth Movement
  2. Ordinance or Law (Some Coverage May Be Provided)
  3. Water Damage Caused by Slow Seepage (Sudden & Accidental Water Damage Is Automatically Included)
  4. Power Failure
  5. Neglect
  6. War
  7. Nuclear Hazard
  8. Intentional Loss
  9. Government Action
  10. Collapse (Some Coverage May Be Provided)
  11. Mold, Fungus, or Wet Rot (Some Coverage May Be Provided)
  12. Birds, Vermin, Rodents, Insects
  13. Wear & Tear, Deterioration

The only real difference between the HO3 and the HOB homeowners’ insurance policy is the type of water protection that comes standard with the policy. As you can see from exclusion 3 above, Water Damage caused by continual & repeated seepage is normally excluded from HO3 homeowners’ insurance policies.

Three types of water damage can be endorsed (added back) to your policy.They are:

  1. Water Backup: Protects against water damage resulting if there is a sewer system backup and water pours out of your toilets and sinks.
  2. Foundation Coverage: Repairs your foundation if it has to be destroyed in order to fix a water problem in or under your foundation. This is typically only an important coverage if you would have to tear up the foundation to get to pipes, as you would with a slab foundation.
  3. Continual & Repeated Seepage: Protects against water damage resulting from a slow leak somewhere in the home.

Most HO3 policies include Sudden & Accidental Discharge of Water coverage automatically, but not water backup, foundation coverage or repeated seepage. Most HOB policies, however, include Sudden & Accidental Discharge of Water, Water Backup and Foundation Coverage automatically. Some even include Continual & Repeated Seepage. Not all HOB policies are equal, so feel free to ask us for clarification on which types of water damage protection are included in your HOB policy.

HOC: Full Open Perils Policy
The HOC Home Policy is full open perils on both the dwelling and contents. The only significant difference between the HOC and the HOB is that the HOC will cover your possessions for open perils, while the HOB covers your possessions for the specific 16 perils listed above in the HOA+ policy.

Important Questions to Ask Us, As Your Insurance Agency

Coverage Questions
Let’s discuss the protection you want on one of your largest investments: your home. Based on definitions we’ve discussed above for HOA, HO3, HOB, etc, which policy would you like to start with? Would you like to make any modifications to that policy? Once we’ve selected your coverage, we’ll be happy to show you verification of all of the coverage with an independent source (such as the OPIC policy comparison chart found here. We understand that insurance is a complex thing and we want you to have peace of mind about the coverage you’ve selected with our agency.

More Information About Your Chosen Home Insurance Carrier

Check the Texas Department of Insurance website for that company’s profile. The profile shows the financial rating of the company, their complaint ratio and any enforcement actions taken by the Department against the company.

Homeowners’ insurance pays to repair or replace your home or personal property if it is damaged or destroyed because of something — such as a fire, storm, theft, etc. — that’s covered by your policy. Your policy states the types of losses it will cover and the maximum amount it will pay.

Note: An insurance policy is a legal contract between you and your insurance company. Read it carefully to understand exactly what it covers and the dollar limit of that coverage. Whether a claim will be covered or not is spelled out in advance at the time you purchase your policy. Always feel free to ask us for clarification, too.

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Condominium Owners Insurance

You want to feel secure knowing that your investment is well protected. It’s important to understand where your condominium association’s coverage ends and where your responsibility begins. Condominium policies typically cover alterations, appliances, fixtures and improvements that are part of the interior of the condominium unit. Condominium policies can also cover the condominium owner’s personal property, as well as reimburse you for medical expenses and liability claims resulting from property damage and personal injury to other people caused by you or members of your family.

PLEASE NOTE: Condominium policies do not cover loss to the exterior of a structure.

A condominium policy will also pay for additional living expenses. This type of coverage is more commonly known as Loss of Use. Loss of Use will cover your expenses if you are forced to move into a hotel or apartment temporarily because of a covered loss to your condominium.

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Renters’ Insurance

Surprises can be good, but some are not. Do you know where your landlord’s coverage ends and your responsibility begins? If you rent a house or apartment and think that your landlord is financially responsible when there is a fire, theft or other catastrophe — then think again. Your landlord may have insurance to protect the building you are living in, but your landlord’s policy won’t replace your personal possessions or pay for your living expenses while the building is being repaired. For example, if another tenant in the building leaves a candle or cigarette unattended and the whole building goes up in flames, then you will have to replace each and every one of your belongings out of your own pocket without renters insurance. Unfortunately, this type of disaster is completely out of your control and there is no way to prevent it. The only way to protect yourself financially against disasters like this is to buy a renters’ insurance policy.

Renters insurance, sometimes referred to as tenants’ insurance, includes three basic types of protection: Personal Possessions, Liability, and Additional Living Expenses.

Personal Possessions
Standard renters’ insurance protects your personal belongings(contents) against damage caused by fire, smoke, lightning, vandalism, theft, explosion, windstorm, water and other disasters listed in the policy. Floods and earthquakes are not covered.

To decide how much insurance to buy, you need to know the value of all your personal possessions, including furniture, clothing, electronics, appliances, kitchen utensils and even towels and bedding. In other words, if your home were to burn, you should have enough insurance to replace all of your possessions.

The easiest way to figure out how much insurance you need to buy is to create a detailed list of all of your personal possessions, with their estimated value. This is called a home inventory, and if kept up-to-date, will make filing an insurance claim faster and easier.

A standard renters’ insurance policy will provide liability protection against lawsuits for bodily injury or property damage that you or your family members may cause to other people. It also pays for damage caused by your pets. For example, if your son, daughter or dog accidentally ruins your neighbor’s expensive rug, you’ll be covered. However, if your children or pets destroy your own rug, you will not be covered.

The liability portion of a renters’ policy pays for both the cost of defending you in court and for court awards, up to the limit of the policy. Liability limits generally start at about $100,000. Some experts recommend that you buy at least $300,000 worth of protection.

Your renter’s policy also provides No-Fault Medical coverage. This means that if a friend or neighbor is injured in your home, you can submit their medical bills directly to your insurance company. You can generally get $1,000 to $5,000 worth for this type of coverage. It does not, however, pay the medical bills for your own family or pet(s).

Additional Living Expenses
Many people don’t know that Additional Living Expenses (ALE) coverage is included in a renters’ insurance policy. If your home is destroyed by a disaster that your policy covers and you need to live elsewhere during repairs, renters’ insurance covers your additional living expenses. Policies will generally reimburse you the difference between your additional living expenses and your normal living expenses. ALE covers hotel bills, temporary rentals, restaurant meals and other expenses you may incur while your home is being rebuilt.

There are two types of renters’ insurance:

  1. Actual Cash Value: Pays to replace your possessions minus an amount for depreciation (the reduction in the value of items due to age and use) up to the limit of your policy.
  2. Replacement Cost: Pays the actual cost of replacing your possessions (with no deduction for depreciation), up to the limit of your policy. The price of Replacement Cost coverage is typically about 10% more than Actual Cash Value coverage but can be well worth the extra cost.

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Umbrella Insurance

This coverage protects your home, autos and other financial assets in the event that someone goes after your net worth following an accident or injury of some kind. Umbrella policies provide coverage of $1 million or more to protect you in the event you are sued for a car accident or injury related to your property. Your damages as well as your legal fees and costs will be covered by this policy.

The Need for Umbrella Insurance
Most financial experts recommend that anyone whose assets include at least a home and a car should consider umbrella insurance. If you are held liable (i.e., found to be at fault) in a lawsuit for an accident or injury, and your homeowner’s or auto insurance has paid out the maximum on your policy, an umbrella policy can be used to pay the balance due the victims, as well as your legal fees.

How Umbrella Insurance Works
Let’s say you accidentally hit another car on a rainy night and seriously injure two people. If they sue, a judgment against you could reach into the millions of dollars to pay for their medical bills and pain and suffering. If your auto insurance policy caps your liability at $300,000, then your coverage for such an event will fall short of what you owe in the judgment. In other words, that difference comes out of your pocket. However, if you have an umbrella policy, then that umbrella coverage would take effect after your auto insurer paid out the maximum $300,000 up to the umbrella limit that you had selected.

How Much Coverage You Can Buy
Umbrella policies offer coverage from $1 million to $10 million. For this additional coverage, you will pay a certain price for the first $1 million of coverage (perhaps $150 to $300 a year) and the next million might cost $75 annually. Beyond $2 million, every additional million you add to the policy will cost approximately $50.

How Much Protection You Need
Let’s discuss your financial situation to determine how much umbrella coverage is right for you. The answer will depend on what you own and your future income-earning potential. Financial advisor Suze Orman recommends that your combined insurance policies, including your auto, home and umbrella policies, cover at least the amount of your net worth, which is the value of your assets minus your debts.

Additional Costs
Since umbrella coverage is designed to activate after your other policy limits have been exhausted, insurers require that you have maximum underlying liability coverage on your home and auto. For most policies, this means at least $300,000 of liability on your home and $250,000 on your auto.

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Rental Property Insurance (Or Landlord Insurance)

A rental property is a great long-term investment. Especially when it’s fully protected.

Rental properties are important investments and often valuable sources of income. What would happen if the buildings you own were damaged? What if a tenant or guest was injured on your property? A landlord insurance policy can help protect landlords with smaller properties, from single-family homes up to four-family rental units. (Properties for more than four families typically fall into the category of apartment buildings and require commercial policies.)

In addition to property and liability coverage, a landlord insurance policy protects against the special risks landlords may face, such as:

  • Damages You Could Be Legally Obligated to Pay
  • Legal Counsel and Fees
  • Up to 12 Months of Lost Rental Income

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Flood Insurance

Flood coverage is rarely included in typical property insurance policies. More than likely, unless you’ve purchased a flood insurance policy, you will not be covered for flood losses. Flood insurance is available through many different insurance companies, but ultimately the federal government bears the risk (through the National Flood Insurance Program (NFIP).

According to the NFIP, a flood is defined as a temporary overflow of inland or tidal waters onto normally dry land, or run-off water from rain, etc. Floods also include mudflows onto dry land, and water-caused erosion or collapse of land along a lake, pond, river or stream, which then results in the temporary overflow of water onto normally dry land. The flood insurance products that the NFIP offers are usually much more complicated than those offered by other property insurers.

The NFIP owns the premiums paid by flood insurance customers, and they pay the claims and expenses of the program. The NFIP establishes one set of policy terms and rates for the various flood insurance policies. As a result, comparison-shopping for flood insurance is not necessary, but we should carefully discuss and review the conditions and requirements of the applicable flood insurance policy.

If you choose to purchase flood insurance, you should know that it takes a minimum of 30 days for your flood insurance policy to become effective, unless you are obtaining flood insurance in connection with purchasing a home or refinancing a mortgage. As such, it’s a good idea to purchase your flood insurance well before you need its protection. Also, depending on the type and location of the building being insured, you may have to submit certain flood insurance forms as part of the application process, that have to be completed by a qualified individual, such as an engineer.

Here are some more helpful links that provide additional homeowners’ insurance information:
Office of Public Insurance Counsel
Texas Department of Insurance
Federal Emergency Agency Management

Questions about what’s best for your home’s protection?

Contact us today for a FREE insurance comparison and consultation!

Roger Welch Agency, LLC
Multiple companies, one agent.

The above Texas property insurance descriptions and examples are meant to supplement, but not replace, the coverage detailed in your individual policy. Please refer to your actual policy contract language for coverage details.