Getting Home Insurance in Houston
Houston is America’s fourth largest city, and home insurance policies in Houston and its surrounding suburbs, such as Katy, help protect homeowners financially in the event that their home or personal belongings are damaged or destroyed by fire, severe weather, vandalism, or theft. Most policies will usually cover the cost of additional living expenses, such as food, lodging, and storage if you are ever forced to leave your home while it’s being repaired or replaced after a covered peril occurs. Most policies also provide liability coverage that helps protect you financially if anyone is ever injured on your property as a result of negligence.
According to the Insurance Information Institute’s (III) Insurance Handbook, most homeowner’s policies only extend liability coverage up to $100,000. However, the III recommends that homeowners extend coverage to at least $300,000. They also recommend that you consider an umbrella policy that provides up to $1 million of coverage in most policies.
The average premium in the state of Texas is $1,511 a year, according to the III. Unfortunately, that is almost twice as much as the national average of $880 a year. You can get a better idea of what insurance in the Houston area will cost by filling out a homeowner profile through the Texas Department of Insurance’s buyer’s guide website. If you are unable to insure your home through a traditional policy, you can apply for the Texas FAIR Plan. These policies were created to provide coverage for homeowners who are unable to purchase a typical policy for reasons beyond their own control.
Factors of Home Insurance Rates in Houston
Home insurance companies in Houston rely on a number of different factors to determine how much a policy will cost. In most cases, the actual cost of replacing your home if it were ever destroyed is the most significant factor. If a home costs more to rebuild, or replace, then the more it will cost to insure. Older homes will also cost more to insure because they are typically more expensive to repair due to their aging infrastructure.
The National Association of Insurance Commissioners (NAIC) Consumer’s Guide to Home Insurance provides an in depth explanation of how insurance companies determine the cost of a policy, but in short, things like the size of your home, your home’s claims history, the claims history of neighboring homes, and the amount of personal belongings you choose to insure also affect the price of your premium. Even things as simple as your proximity of your home to fire stations and hydrants can raise or lower rates. Be sure to go over the details with your agent or broker when getting a quote in Houston to know exactly what will affect the cost of your policy.
Insurance companies will also take a particularly close look at the crime rates in your Houston neighborhood. If your home lies in an area of Houston that has a high rate of theft, burglary, and vandalism, then you are likely to have to pay higher premium costs. You can get an idea of the crime rate in your neighborhood from the chart below:
Another reason why Houston-area residents have higher insurance premiums is because of the number of hurricanes that pass through the Gulf of Mexico each year. The city has taken 10 direct hits since 1990, according to the University of Houston’s Texas Hurricane Center. The area was also hit hard by Hurricane Ike in 2008. That storm was the second costliest hurricane in U.S. history, totaling more than $29 billion in damages.
Because of the area’s history of hurricane activity, you will want to ensure you are covered from damages done by both wind and flooding. Unfortunately, a separate policy is usually required for each, in addition to your basic homeowner’s policy. The state’s Department of Insurance provides a helpful comparison guide to help area residents understand the difference between flood insurance, and wind and hail insurance. You can use this guide to make sure you are a properly covered if your home is every damaged by one, or both.