Homeowners Insurance? HO3? Dwelling Fire? I’m So Confused!

Are you confused by the multitude of different types of insurance policies that exist? Do you ever ask yourself what the purpose of one policy versus another policy is? Have you ever thought that insurance is just too complicated? If you answered yes to any of the above questions, you’re in good company. You’re not from another planet; you are from Texas, and you possibly live in the Greater Houston area.

In the last 18 months, Texas has seen a lot of new transplants from California, Georgia, and New York to name a few. Texas has a lot of hot markets and Houston’s housing market is on fire!  People are relocating to Houston from all over the country and real estate investors are also flocking to the area in search of investment properties. Texas law requires that mortgaged properties carry insurance, and the expense for Texas homeowners insurance can be substantial based on many factors such as the age of the home, the price of the home, etc.

Isn’t all Texas Homeowners Insurance the Same?

No, it is not. How the home is to be used, dictates what kind of policy is required. Actsphere Insurance Group’s experts are here to clear up the surprise and confusion home buyers may be feeling by explaining the differences between types of coverages for your home purchase. There are two main types of coverage one requires when insuring their home or rental property:

• homeowners insurance (also referred to as an HO3 policy)
• dwelling fire insurance

Which One Do I Choose? A Texas Homeowners Insurance HO3 Policy or a Texas Dwelling Fire Policy?

Texas Homeowners Insurance HO3 Policy

Homebuyers who will be using their home as their primary residence (meaning they will be living in it themselves – not renting it out), will need an HO3 homeowners insurance policy. An HO3 homeowners policy covers the primary structure of the house and its contents. The homeowner’s building (structure) AND contents (furniture, appliance, clothes, jewelry, etc.) are covered under a standard HO3 policy. This policy is solely designed for the person who owns the house and is living it. It also usually covers liability in case someone is injured in your home.

Texas Dwelling Fire Insurance

Dwelling Fire insurance is different from homeowners insurance. A dwelling fire policy is designed to protect the structure of a home that someone owns but does not live in him/herself. Usually this is the case when someone owns a home that he or she rents out to tenants and is acting as a landlord. Dwelling fire policies cover the structure of the building, but personal contents are normally excluded in this type of policy. There are some exceptions – such as when a landlord may own the appliances inside the home and needs to have them covered under the dwelling fire policy on the property.  Similar to a Homeowners Insurance Policy, Dwelling Fire policies will cover losses caused by fire, wind, hail, hurricanes (but NOT flooding due to a hurricane however. A separate flood insurance policy is required for that). Again, though, most of the items inside the home are excluded from coverage under a Texas Dwelling Fire Policy. Since the contents do not belong to the owner, it is the tenants’ responsibility to have them covered. Tenants will need to insure their belongings with a Texas Renters Insurance Policy.

Properly Cover Your Investment!

If you have a vacation homes, an Airbnb, or a rental property in the Greater Houston area, it is important that you have a Texas dwelling fire policy. As new homeowners are buying properties in Pearland, Sugar Land, Humble Katy, Cypress, Richmond, Spring and the Woodlands, TX, it is important that they have the proper coverage for the property’s intended use.

More Questions?

Actsphere welcomes you to the great state of Texas and the remarkable city of Houston. If you have any questions about homeowners insurance or dwelling fire insurance, we would be happy to assist you. Call or text us today at 832-956-1033 or contact us through Actsphere’s website. Actsphere Insurance Group. Stewardship is Our Policy.