Have you noticed your cereal box getting smaller as the price increases? Have you noticed that you need to pay extra money to buy frozen pizzas with the best ingredients? Have you noticed that modern plastic automobiles are frequently “totaled” after just one accident?
Just as so many other things, some Texas homeowners insurance policies are becoming a bit less valuable over time. Insurance rates may continue to climb, but your coverage is not as “comprehensive” as it used to be. Are Texas homeowners insurance policies becoming much more specific?
The Texas Watch Consumers Protection Association had conducted research on 2003 changes in Texas insurance laws. It noted that heretofore, most Texas homeowners insurance policies had used one of three standard forms, including the HO-B comprehensive form.
The beauty of comprehensive coverage was that it was a nice general catch-all. Comprehensive coverage included all potential house damage “unless specifically excluded.” The modern comprehensive insurance might not cover as much as older policies.
Texas Watch found that in 2001, 96% of Texans used the comprehensive HO-B insurance policy and in 2003, this number had dropped to 15%. The Texas Office of Public Insurance Counsel stated that there were over thirty homeowners insurance forms available in the state in 2003.
Why were more forms needed? The change that occurred in Texas homeowners insurance involved the removal of some very common protections from the comprehensive coverage and the creation of more “named peril” coverage.
In the “named” homeowners insurance policies, you will only be protected if the danger is specifically “listed, identified or named.” Of course, it is very difficult to “specifically name” each and every danger to your property. In some respects, it connotes an attempt to predict the future with a crystal ball.
Understanding your homeowners insurance policy has become much more difficult. Some of the most common unforeseeable events that were removed from the comprehensive coverage include the following:
Unfortunately, each of these dangers are actually quite common claims made on Texas homeowners insurance policies. These may or may not be “specifically named” on your home insurance policy. So, read the fine print.
Foundation coverage is a common homeowners insurance policy concern. Cracks to your walls and foundation are now listed under earthquake coverage. Some insurance experts want to create sub-categories for natural earthquakes versus man-made earthquakes (i.e. construction equipment vibrations or fracking).
Texas Watch also found that payouts for different problems was reduced also. Coverage for Additional Living Expenses (ALE) – when you must move out because your home was damaged so badly – was cut in half. Named perils makes it more difficult to win a claim.
So what can you do? Read your insurance policy carefully. Try to determine what exactly is listed in a comprehensive policy. If you have specific concerns, you might want to purchase additional policies or add them “by name.”