What Is Homeowners Insurance And What Does It Cover?

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Texas homeowners insurance policies come in different forms, with different types of coverages. The policies are standardized, and are the same no matter which insurance company writes the policy. Basically, the standard homeowners’ policies cover the following:

Building: covers damage to the structure of the home and any unattached structures such as fences, garages and storage sheds.

Other Structures: covers damage to buildings or structures other than the main home. This includes an unattached garage, boathouse or other unattached structure.

Personal property: covers theft, damage or destruction to the contents of the home.

Liability: covers you and your family if you are sued and found responsible for someone else’s injuries or property damage.

Medical payments: covers medical bills for people hurt on your property, and for some injuries away from your home.

Loss of use: covers some living expenses if your home is too damaged to live in during repairs.

Wind v. Flood: Most homeowners’ policies will cover damage from windstorm, hurricane and hail, as well as fire and lightening. Most homeowners’ policies will also cover “sudden and accidental water damage,” but not flooding or water damage resulting from continuous and repeated seepage. Following Hurricane Katrina, one of the biggest areas of dispute between insurance companies and homeowners was whether damage resulted from wind (and covered under a homeowners policy) or from flood (and not covered under a homeowners policy but perhaps under a flood policy). Insurance companies typically denied damage that was caused by storm surge, even if the damage appeared to have been caused BOTH by the storm surge and by water associated with wind damage. It is likely that the insurance industry will attempt to avoid coverage for IKE-related claims on the same grounds.

Mold coverage: Many homeowners policies provide basic coverage for mold, fungi and other microbes. However, the cause of the mold must result from a covered loss under a homeowners policy. Insurance companies will often complain that the cause of the mold resulted from flood damage, so it is not covered under a homeowners policy.

Even where the policy does in fact cover mold damage, coverage under the standard policy is limited to the damage itself and does not cover costs of testing, mold remediation and living expenses due to mold. However, in some circumstances the homeowner may have purchased an endorsement that does cover these additional costs. Check your policy to see what coverage you have purchased.