What is Homeowners insurance?
Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it.
Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets.
Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility.
Factors that Affect Your Premium
Companies use a process called underwriting to decide whether to sell you a policy and what rate to charge you. Each company must file its underwriting guidelines with Texas Department of Insurance (TDI) and send them updates if the guidelines change. Companies use various factors to determine premiums. These include:
- Your home’s age and condition. Companies may refuse to insure homes in poor condition, but they may not deny coverage solely because of a home’s age or value. However, most companies will charge you more if you are insuring an older house.
- Your home’s replacement cost. If you have a replacement cost policy, your policy will pay to rebuild your home if it is destroyed. Your premiums will increase in relation to the amount of your replacement cost.
- Construction materials used in your home. Homes built primarily of brick are less expensive to insure than frame homes.
- Where you live. Premiums will likely be higher in areas with a higher crime or high storm activity.
- Availability of local fire protection. Premiums are usually lower for homes in areas with access to good fire protection.
- Your claims history. Companies use your claims history to determine what to charge you for your coverage. Your claims history includes both the type and the number of claims filed.
- Your credit score. Companies may consider your credit score when deciding whether to sell you a policy and what to charge you. However, a company cannot refuse to sell you a policy or cancel or non-renew your policy solely on the basis of your credit score. Companies that use credit scoring must file their credit scoring models with TDI.
Discounts can help you save money on your insurance. Companies may offer premium discounts if you take steps to reduce the chances of a loss. Each company sets the amount of the discounts it offers to its policyholders. Some of the more common discounts are listed below:
Raymond Longoria Insurance represents a carefully selected group of financially sound, reputable insurance companies, and we place your policy with the company offering the best coverage at a competitive price. Call us for a McAllen home insurance quote at (888) 942-9217.
- Impact-resistant or noncombustible roofs
- Burglar, fire, and smoke alarm systems
- Automatic sprinkler systems
- Fire extinguishers
- Age of house (companies set own standards)
- Premises in good condition (companies set own standards)
- House insured to full replacement cost
- Good claims experience for three consecutive years
- Marking personal property with an identifying number (inspection required)
- Other policies with same company or group
- Senior citizens discount