Texas homeowners insurance, explained line by line

What does a Texas homeowners insurance policy actually cover?

The short answer: A Texas home policy is really six coverages in one: the house, other structures, your belongings, extra living costs after a covered loss, personal liability and medical payments to guests.

Each part has its own limit; the Texas Department of Insurance homeowners guide (updated June 2026) walks through them.

Our team spends the most time on the dwelling limit. Market value includes land; rebuild cost is labor and materials. If construction costs rise and your limit doesn't, you're underinsured without changing a thing.

What's the difference between HO-A, HO-B and HO-C policies in Texas?

The short answer: Texas uses its own policy names: HO-A covers only listed perils, HO-B covers the house against anything not excluded, and HO-C extends that open-peril protection to your belongings too.

Texas has its own form names, described in the TDI overview of Texas homeowners policies. What matters is named perils (only listed causes are covered) versus open perils (everything unless excluded).

An HO-B is what most homeowners picture as a standard policy. An HO-C can make sense when your belongings are worth a lot, because open-peril coverage for contents is broader than a named list.

Should your Texas home policy pay replacement cost or actual cash value?

The short answer: Replacement cost pays what it takes to repair or replace with new materials; actual cash value subtracts depreciation, so an older roof or older belongings can pay out far less.

TDI says that “most mortgage companies will require that you have a replacement cost policy as a condition of your loan” (TDI home insurance tips, updated December 2025). The Texas catch is the roof: TDI's roof replacement guide (updated April 2026) notes some insurers switch roofs to actual cash value as they age, so check every renewal.

Replacement cost usually pays in two parts: ACV first, the rest after repairs. TDI's replacement cost vs. actual cash value page uses this example: a $200,000 home, a 2% wind/hail deductible ($4,000) and a $10,000 roof replacement.

Same storm, same deductible, and ACV pays nothing on the older roof. For cosmetic damage and impact-resistant roofing, see our guide to hail and your Texas home.

Not sure whether your roof is on an ACV schedule? Start a free review or call (512) 691-6400 and we'll read your declarations page with you.

What doesn't a standard Texas home policy cover?

The short answer: Flood is the biggest gap — home policies don't cover it — followed by foundation damage (usually an optional endorsement), wear and tear, and water damage that builds up slowly.

TDI is blunt: “Home insurance policies don't cover flood damage.” Flood is a separate policy, required by lenders in flood zones, and according to FEMA an NFIP policy typically takes 30 days to become active.

Winter Storm Uri in February 2021 produced 511,473 claims, about 85% residential, and $10.6 billion in case-incurred losses (TDI winter weather summary, June 2022). TDI's winter safety tips say burst pipes may be covered as sudden and accidental water damage, but a claim can be denied if the pipes weren't protected, such as by keeping the heat on.

Why has homeowners insurance in Texas gotten so expensive?

The short answer: Statewide, the average Texas homeowners premium rose from $2,124 in 2021 to a preliminary $3,489 in 2025, according to TDI, which points to construction costs, severe weather and reinsurance as industry factors.

These are statewide averages, not what you will pay, and they show increases slowing in 2025.

What drives your number? TDI's page on how home insurance costs are calculated (updated September 2026) lists the home's age, the roof's age and material, where you live, the cost to replace the house, your claim history and your credit score. Industry-wide, it points to repair-cost inflation, freezes, hail, tornadoes and reinsurance. TDI doesn't set rates.

How do percentage wind and hail deductibles work in Texas?

The short answer: A percentage deductible is figured on your dwelling limit, not the claim, so a 2% wind/hail deductible on a $350,000 dwelling is $7,000 per claim.

TDI notes your wind/hail deductible may differ from the one for other perils. Many Texas policies set it as a percentage of dwelling coverage, while fire and theft use a flat amount.

Raising your dwelling limit also raises a percentage deductible. Texas law says a roofer can't waive, rebate or absorb your deductible, and the insurer may ask for proof you paid it (TDI, Roofing and insurance: Know the law). Our hail guide covers claims and contractor rules in depth.

What are your rights if your Texas home policy is canceled or not renewed?

The short answer: For policies bought or renewed in 2024 or later, your insurer must give 60 days' notice before nonrenewing (10 days for a cancellation), and since January 2026 it must explain the reason in writing.

Per TDI's canceled or not renewed page (updated January 2026), nonrenewal notice is 60 days for policies bought or renewed in 2024 or later (30 days if 2023 or earlier); cancellation notice is 10 days. Grounds include three or more non-weather claims in three years (warning after two), 60+ days vacant or poor condition, but not a claim the policy didn't cover.

• SB 213 (effective September 1, 2025): insurers can't require you to bundle home and auto. Bundling can still be a smart choice.
• SB 458 (policies issued or renewed on or after January 1, 2026): home and auto policies must include an appraisal clause for disputes over the amount of a loss.
• HB 2067 (effective January 1, 2026): you're entitled to a written explanation when an insurer declines, cancels or nonrenews your policy.

Those laws are summarized in TDI Bulletin B-0012-25. One more change is in progress: in a September 29, 2026 news release, TDI proposed clarifying its rules so companies can't decline or nonrenew a policy based on the age of a house or its roof. Insurers could still weigh the home's current condition. As of October 2026, it's a proposal with no effective date.

What should you have ready for a Texas home insurance quote?

The short answer: Have the property details, your roof's age and material, your current declarations page, your claim history and your lender's requirements ready, and the quote goes quickly.

1. Gather the property basics
   Address, year built, square footage, foundation type and any major updates to wiring, plumbing or heating and air.
2. Know your roof
   The year it was installed and the material, both rating factors TDI lists.
3. Find your current declarations page
   It shows your form, limits, deductibles and whether the roof is on replacement cost or ACV.
4. List past claims honestly
   Insurers check claim history, so an accurate list avoids a price change later.
5. Note what your lender requires
   Your mortgage company's coverage requirements and whether the home is in a flood zone.
6. Ask for a coverage review, not just a price
   We'll walk through limits, roof settlement and deductibles with you. Start with the form on this page, use our guided quote, or call (512) 691-6400.