Residential property insurance is a term that encompasses several different types of insurance that vary by the kind dwelling or property you are insuring. On this page you will find explanations of the various types residential property insurance available, relevant news items, and other important information relating to residential property coverage.
HOMEOWNERS / DWELLING / CONDOMINIUM / TENANTS & RENTERS / FLOOD INSURANCE / TYPES OF COVERAGE / CLAIMS SETTLEMENT / RESIDENTIAL PROPERTY NEWS
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Homeowners insurance provides you financial protection in the event that your home is destroyed or damaged due to unforeseen or catastrophic event. In addition to your home, homeowners insurance also covers your belongings (or personal property) and can reimburse you for medical expenses and liability claims resulting from property damage and personal injury to other people caused by you or members of your family.
A homeowners policy will also pay for additional living expenses (or ALE). ALE will cover your expenses if you are forced to move into a hotel or apartment temporarily because of a covered loss to your home.
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Dwelling insurance policies are different from homeowner policies because they do not require the insured property to be owner occupied. Dwelling policies typically cover rental properties but can also be offered to policyholders in those instances when the structure does not qualify for the company’s homeowners policy.
PLEASE NOTE: Dwelling policies cover only the structure and do not provide coverage for personal property contained in the building.
Dwelling policies do not provide coverage for Additional Living Expenses (or ALE). Dwelling policies do not typically offer personal liability coverage either but, this coverage may be added by endorsement in some instances.
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Condominium policies cover alterations, appliances, fixtures, and improvements that are part of the interior of the condominium unit. Condominium policies can also cover the condominium owner’s personal property and can reimburse you for medical expenses and liability claims resulting from property damage and personal injury to other people caused by you or members of your family. PLEASE NOTE: Condominium policies do not cover loss to the exterior of a structure.
A condominium policy will also pay for additional living expenses (or ALE). ALE will cover your expenses if you are forced to move into a hotel or apartment temporarily because of a covered loss to your condominium.
Tenant or renters insurance covers personal property inside an apartment or other rented structure. PLEASE NOTE: Tenant policies do not cover damage to the interior or exterior of a structure.
Tenant policies will reimburse you for medical expenses and liability claims resulting from property damage and personal injury to other people caused by you or members of your family. A tenant policy will also pay for additional living expenses (or ALE).
Residential property policies do not cover damage caused by flood. Most residential property policies define flood to include: surface water, waves, tidal water, storm surge, tsunami, seiche, overflow of a body of water, or spray from any of these. Flood Insurance can be obtained through FEMA and the National Flood Insurance Program (NFIP). You can access their website HERE.
There are two basic types of coverage offered under residential property policies:
ALL RISK (also known as a comprehensive coverage or open perils coverage) - offers broad protection and covers all perils unless they are specifically excluded by the policy. You should always carefully review the excluded causes of loss section of your policy. Even the most comprehensive policy will exclude certain types of loss (damage caused by flood, for example).
NAMED PERILS - (also known as specified perils coverage) offers narrower protection than an all risk policy and covers only those perils specifically named under the policy. A policy that offers named perils coverage will also contain exclusions to perils named under the policy. If you are thinking of purchasing a policy that provides named perils coverage only, it is important make certain that the policy provides coverage for the perils that most concern you.
PLEASE NOTE: It is not uncommon for homeowners policies to provide all risk coverage on the dwelling and named perils coverage for the personal property. Please visit the OPIC Policy Comparisons Page for more information on the types of coverage offered by specific companies.
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Residential property policies also offer different methods of repairing or replacing your property:
REPLACEMENT COST - pays for all necessary expenses associated with rebuilding or repairing damaged property, up to the policy limits, less any applicable deductible amount.
ACTUAL CASH VALUE - factors in depreciation costs to your claim and pays you the costs to replace or repair the damaged property, less this depreciation and less any applicable deductible amount.
PLEASE NOTE: Most insurance companies that offer replacement cost will initially pay for the loss on an actual cash value basis. The company will pay any additional costs associated with the “replacement cost” once repairs have been made to the property, or the damaged property has been replaced.
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HARTFORD AGREES TO REDUCE RATES AND PAY REFUNDS
Austin – Agreements between the Office of Public Insurance Counsel, the Texas Department of Insurance, and two subsidiaries of the Hartford Financial Services Group were finalized June 30, 2010. These agreements will reduce rates for Texas consumers that purchase homeowner insurance from the Property and Casualty Company of Hartford or the Hartford Lloyds Insurance Company.
Public Counsel, Deeia Beck, said “we felt that the rate increases these companies implemented last year were too high. The staff at the Department agreed, and we were able to work something out to get the rates reduced and return the overcharges to the policyholders.”
The Property and Casualty Company of Hartford agreed to reduce its rates by 10%. Similarly, the Hartford Lloyds Insurance Company agreed to reduce its rates by 3.1%. The companies will make new rate filings by July 30, 2010 to implement these reductions. In addition to a rate reduction, policyholders will also receive refunds for the overcharges the companies collected since January 29, 2010 plus interest. Policyholders can expect a refund from the company by December 30, 2010. The Commissioners Orders can be downloaded below:
Commissioner Order 10-0602
Commissioner Order 10-0603
OPIC’S ROLE IN STATE FARM CASE RESULTS IN $110 MILLION DOLLAR INCREASE IN ORDERED REFUNDS
The long awaited order in the State Farm Lloyds litigation has been issued by the Texas Department of Insurance. The order requires State Farm Lloyds to repay or credit $310 million dollars in overcharges and interest to its policy holders. OPIC successfully argued that State Farm Lloyds overcharged policyholders through August of 2008.
Commenting on the order, Public Counsel Deeia Beck said “While I am disappointed that larger refunds were not ordered, I am very happy that the Commissioner concurred with our position that refunds were due though August 2008 instead of June 2006 as argued by his staff.” Winning this issue increased the total refund amount by $110 million dollars. This would not have occurred but for OPIC’s role in this litigation.
With respect to a possible appeal, Ms. Beck stated “We are considering all of our options at this time and a decision will be made in short order.” She stated further, “In making this decision a number of issues must be considered including but not limited to the likelihood of success on appeal and the additional time it would take to get a final resolution.” First and foremost, Ms. Beck stated that her decision will be guided by what is in the best interest of State Farm Lloyds' policyholders, past and present. She said “I know this has been an ongoing burden to these policyholders and they want a fair resolution.” FREE HURRICANE IKE MEDIATION PROGRAM A Hurricane Ike Mediation Pilot Program has been created to help policyholders mediate their residential property claim disputes with their insurance company. Participation by insurance companies is voluntary and at this time there are three insurers participating in the program: AAA Texas, Allstate, and Farmers.
If your Hurricane Ike claim dispute involves one of these participating insurers, and your claim amount is more than $1,000, you may be eligible to participate in the program. The difference between what the company is willing to pay you and what you believe it will take to repair the damage must be more that $500 to be eligible for mediation (although you and your company can agree to mediate a lower amount). Participation in the program is FREE for the policyholder unless you cancel your scheduled mediation conference without good cause and later want to reschedule.
To obtain more information about the Hurricane Ike Mediation Program, and to download a copy of the mediation request form, please visit the TDI Hurricane Ike Consumer Resource Page by clicking HERE.
ANNOUNCING THE OPIC COASTAL CONSUMER PAGE
As a result of recent legislation, the Texas Department of Insurance (TDI) has adopted emergency rules that amend the Texas Windstorm Insurance Association (TWIA) Plan of Operation. These rules adopt several new TWIA eligibility requirements that impact coastal consumers' ability to obtain and maintain coverage through TWIA. OPIC has created the brochure: Windstorm Insurance in Texas: What Has Changed? to provide an overview of the new TWIA requirements.
In conjunction with this brochure, OPIC has also developed a Coastal Consumers Page to provide insurance consumers along the coast with a tool to arm themselves with the knowledge to make informed decisions regarding their coverage. On this page you will find OPIC consumer brochures, policyholder notices, links to rules and other regulatory actions affecting coastal consumers and important news impacting the Texas coast.
To access the new brochure and the Coastal Consumer page, please click HERE
CLICK HERE to compare homeowners policies available in Texas
CLICK HERE to return to the OPIC homepage
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