Guide to Texas Home Insurance Carriers

Especially in the Lone Star State, where severe weather is so common, homeowners' Insurance is key to protecting your property and finances. In this article, we’re going to expand our insurance series by taking a closer look at the different types of insurance carriers and coverage, along with their benefits and drawbacks.

For more information, read our guide to home insurance and storm damage.

The Big Picture: Types of Homeowners' Insurance.

Homeowners' Insurance is a safety net for homeowners, so severe weather won’t drain your wallet – even if it does damage your property. The concept is simple: If you have home insurance, your carrier will pay for repairs from certain types of damages. We’ll get a bit more into the weeds in the next section. For now, let’s take a look at the major classifications that set carriers apart.

1. National Carriers

National carriers are exactly what they sound like – big insurance companies that operate across many states. As such, they tend to offer more comprehensive coverage options and have extensive resources and experience available. While this can streamline the claims processes, size and efficiency can come along with standardization, a lack of personalized service, and limited offerings.

2. Regional Carriers

Regional carriers focus on a more specific geographic area than national carriers. As a result, they can tailor their coverage to the unique conditions of their homeowners. For instance, regional carriers are typically more attuned to local weather patterns and risk. Having a carrier who understands your local conditions in this way can be a significant advantage during the claims process – particularly in Texas, where natural disasters like hurricanes and tornadoes can pose a significant threat.

3. Surplus Lines Carriers

Surplus lines carriers focus on an even narrower population than regional carriers by filling in gaps that other insurers don’t cover. For instance, they often provide coverage for high-risk properties or unique situations that traditional insurers don’t want to cover. So, if you’re struggling to find appropriate coverage from other major carriers, then surplus lines carriers can be of service.

However, TDI says “it’s best to buy insurance from a company that TDI licenses” because “if a surplus lines company fails, or becomes insolvent, your claims could go unpaid.” If the alternative is not having the coverage you need, this may be a risk you’re willing to take. Just make sure you understand the terms and conditions of their policy to avoid surprises.

A Closer Look: Homeowners' Insurance Policies & Financials.

The Texas Department of Insurance (TDI) says most home policies cover damage from fire and lightning but not flooding, sudden releases of water and smoke but not continuous leaks, civil commotion and vehicles but not earthquakes, theft but not during long vacancies, and hail and hurricanes – but not if you live on the Gulf Coast.

Most carriers will combine different types of coverage into one insurance policy. Let’s take a look at some of the most common policies:

Dwelling Coverage will pay for any damage or destruction to your home so long as it was caused by a covered event. For instance, hail might damage your roof. If your policy covers hail damage, then the repairs will be paid for by insurance.
Personal Property Coverage, on the other hand, protects your belongings. For instance, a leaking ceiling may damage furniture and clothing. Personal property coverage would pay to replace the damaged property.
Liability Insurance covers accidents that occur on your property, protecting you from potential lawsuits and medical expenses. While umbrella policies in Texas can provide extra liability coverage beyond the limits of your standard policy, they won’t cover underinsured dwellings or personal property, nor will they kick in for natural disaster damage.
Additional Living Expenses cover costs incurred if you need to temporarily relocate due to damage to your home, such as hotel stays and meals.

Use TDI’s Tool to Check on Homeowners' Insurance Financials

When choosing a homeowners' insurance carrier (particularly if you’re looking at a surplus line carrier), it’s important to evaluate more than just the coverage types and costs. The financial stability and reputation of the carrier matter just as much.

Thankfully, the TDI has a tool that helps you research a carrier’s financial health and consumer complaint history. Why should you care about financials? Because it’s a sign of a carrier's ability to pay out claims – especially in the aftermath of widespread disasters. Choosing a financially stable insurer means you can rest assured that they will be there when you need them most.