During the latter part of May 2015, Texas experienced some of the worst flooding the state has seen in more than three decades. Floodwaters destroyed and damaged homes between Austin and San Antonio. The last time that Central Texas experienced flooding on this scale was a flood that took place on Memorial Day in 1981. The result of that flood was the loss of 13 lives and millions of dollars in property damage. In the days and weeks following the 1981 flood, homeowners insurance was on the minds of Texas residents. However, years of relatively stable weather and only a few natural disasters has caused to some to doubt the importance of homeowners insurance and subsequent flood insurance. Now, as residents are forced to sit idly by and watch their property destroyed by floodwaters, the value of having adequate homeowners insurance and flood insurance has been brought to the fore.

Why Having Homeowners Insurance Is Important

The number one reason why having homeowners insurance is so important is because for most people, their home is the most valuable possession they own. An average American will work one third of their life just to pay off their home. Very few individuals have sufficient savings to cover major damage to their home. This is where homeowners insurance steps in.

Homeowners insurance is designed to provide protection during those “what if” scenarios. For example, what if a hail storm, like the hailstorm that plummeted Hidalgo County in the spring of 2012, happens? The resulting roof repairs and siding repairs can number into the tens of thousands of dollars. Roof damage can leave a home in operable. If an individual does not have homeowners insurance, they will not to be able to cover the expense, their home may be rendered unlivable, and the value of their home will drop drastically.

Arguments against Homeowners Insurance

While the majority of Texas residents understand the importance of purchasing homeowners insurance, there are some individuals who are still skeptical about its value. They worry that they are paying for nothing. Some individuals argue that instead of purchasing homeowners insurance, they will set money aside and then in the event a disaster strikes, they will use the money they have saved in order to make a repair.

Unfortunately, there are multiple errors in this way of thinking. First, when a person purchases home insurance, it is true that they do not receive something tangible immediately. However, in exchange for their monthly premium, what they do receive is the peace of mind that comes from knowing that if something happens, the insurance company will foot the bill.

Second, based on information provided by governmental agencies monitoring insurance rates, on average Texas homeowners will pay less than $1,700 in insurance premiums. However, according to statistics provided by Angie’s List, the average price to repair or replace a roof is between $11,000 and $25,000. This means that it would take anywhere between 6 and 14 years to save up enough money to equal the amount needed to cover the repair of a roof. While most individuals who make this argument have good intentions, there are very few individuals who actually take the money they would have used for homeowners insurance and save it in case of a future disaster. In the vast majority of cases, individuals who choose not to purchase homeowners insurance find themselves in a quandary when an unexpected accident happens.

What Texas Homeowners Insurance Policies Cover

Texas homeowners insurance policies are divided into two types. There is what is referred to as an ‘all risk policy.’ These policies provide comprehensive coverage and will protect the homeowner against any type of loss unless the policy explicitly excludes them.

The second type of Texas homeowners insurance is called a ‘peril policy.’ These policies dictate specific causes of loss that they will cover. Depending on the type of policy selected, a Texas homeowner could expect coverage for the following things:

Dwelling

This includes any damage or a complete destruction of a home.

Personal Property

This would include items in the home, like appliances, furniture, or clothing that is either stolen or destroyed.

Additional Structures

This includes things like buildings not attached to the home such as sheds, fences, and unattached garages.

Loss of Use

This is going to cover housing, rental expenses, motel expenses, and other expenses that arise when a family needs to temporarily move because of damage in their home from a covered loss.

Personal Liability

This defends the homeowner in court and provides coverage if they are legally responsible for someone who is injured on their property.

Medical Payments

This includes the medical bills of anyone who is hurt on the property. They can also include injuries away from the property, such as if a dog bit someone in the park.

Homeowners insurance is a must for Texas residents who are concerned about protecting themselves from liability, protecting themselves from financial loss, and protecting and maintaining the value of their home.