Texas homeowners face unique risks — hail, wind, flooding, and foundation movement. Standard policies cover some of these and exclude others. Here is what you need to know.
Homeowners Insurance in Texas: What Your Policy Covers — and What It Doesn't
Texas is one of the most challenging homeowners insurance markets in the country. Hailstorms, severe wind events, flooding, and the unique soil conditions that cause foundation movement all create risks that don't exist at the same level in most other states. Understanding what your policy actually covers — and where the gaps are — is essential for every Texas homeowner.
What a Standard Texas Homeowners Policy Covers
A standard HO-3 policy (the most common type) covers your home and personal property against a broad list of named perils, and provides liability protection if someone is injured on your property.
Dwelling coverage (Coverage A) — Pays to repair or rebuild your home's structure after a covered loss. This should reflect the actual cost to rebuild your home — not its market value, and not what you paid for it. Rebuilding costs in Texas have risen significantly; many homeowners are underinsured here without realizing it.
Other structures (Coverage B) — Covers detached garages, fences, sheds, and other structures on your property. Typically 10% of your dwelling coverage.
Personal property (Coverage C) — Covers your belongings — furniture, clothing, electronics, appliances — if they're damaged or stolen. Standard policies cover personal property at actual cash value (ACV), which factors in depreciation. Replacement cost value (RCV) coverage costs more but pays what it actually costs to replace items today.
Loss of use (Coverage D) — Pays for temporary housing and additional living expenses if your home is uninhabitable after a covered loss.
Personal liability (Coverage E) — Covers you if someone is injured on your property or you accidentally damage someone else's property. Standard limits are $100,000 — most homeowners should carry more.
Medical payments (Coverage F) — Pays minor medical bills for guests injured on your property, regardless of fault.
What Texas Homeowners Policies Typically Exclude
This is where Texas homeowners get surprised.
Flooding — Standard homeowners policies do not cover flood damage. Period. This is one of the most common and costly misconceptions in insurance. If your home floods from a storm surge, rising creek, or heavy rainfall, your homeowners policy won't pay. Flood insurance is purchased separately through the National Flood Insurance Program (NFIP) or private flood carriers.
Foundation movement — Texas expansive clay soils cause foundation movement that damages thousands of homes every year. Standard homeowners policies exclude damage caused by earth movement, settling, shrinking, or expansion — which is exactly what causes most Texas foundation problems. This is a significant gap for DFW homeowners.
Wind and hail deductibles — Most Texas policies have a separate, higher deductible for wind and hail claims — often 1% to 2% of your dwelling coverage. On a $400,000 home, that's a $4,000–$8,000 out-of-pocket before your insurance pays anything on a hail claim.
Sewer backup — Damage from a backed-up sewer or drain is typically excluded from standard policies. A sewer backup endorsement can be added for a modest premium.
Mold — Coverage for mold is limited or excluded in most Texas policies, particularly if the mold resulted from a long-term moisture problem rather than a sudden covered event.
Texas-Specific Risks Worth Addressing
Hail: DFW averages more hail events per year than almost any metro in the country. If your roof is more than 10–15 years old, your carrier may require an inspection or apply an ACV settlement on roof claims rather than replacement cost. Knowing your policy's roof settlement method before you have a claim matters.
Wind: Coastal and near-coastal Texas properties may have separate wind coverage requirements or exclusions. Even inland DFW properties can face significant wind damage from severe thunderstorms.
Flooding: Even properties not in a designated flood zone can flood. About 25% of flood claims come from properties outside high-risk flood zones. If you're in DFW, the question isn't whether flooding is possible — it's whether you're covered if it happens.
Replacement Cost vs. Actual Cash Value
This distinction matters more than most homeowners realize. If your roof is 15 years old and gets damaged in a hailstorm:
- ACV settlement: Your insurer pays the current depreciated value of a 15-year-old roof — significantly less than what a new roof costs.
- RCV settlement: Your insurer pays what it actually costs to replace the roof with a comparable new one.
Getting the Right Coverage
Texas homeowners insurance isn't one-size-fits-all. The right program depends on your home's age, construction, location, and your specific risk profile. As an independent agency, we work with multiple carriers to find coverage that actually fits — not just the cheapest policy that meets your mortgage lender's minimum requirements.
Call us at 817.277.6166 or request a quote online. We'll review your current coverage, check your dwelling limits against today's rebuilding costs, and make sure the gaps are addressed.