The Average Cost of Homeowner's Insurance in Texas

Homeowners insurance costs in Texas are based, in part, on the type of coverage that is needed and the types of perils or losses that can occur. These can include losses that result from storms or weather, fire and theft. People that live near the coast also have the additional threat of hurricanes from the Gulf of Mexico. As a result, residents in one part of the state can pay more for homeowners insurance than residents in another.

Insurance Costs

Studies have been conducted by the National Association of Insurance Commissioners that track the average cost of homeowners insurance per state. These studies determine the average amount for a standard homeowners policy and a renters insurance policy. The average cost for a homeowners policy in the state of Texas is $1,409 for 2009. The average cost paid for a renters insurance policy in 2009 is $261.

Replacement Costs

One of the main factors in the cost of a homeowners insurance policy is the replacement cost coverage for a home. Replacement cost coverage is the amount that would be required to rebuild a home based on current building costs. This coverage will pay to completely rebuild your home in the event that it is destroyed or becomes unlivable by a loss that is covered by the policy.

Covered Losses

Most homeowners insurance policies that are sold in the state cover a standard set of losses. These include damage that results from fire, smoke, lightning, aircraft and vehicles. Coverage is also provided for damage resulting from vandalism, malicious mischief and theft. Other types of damage that has been caused by an explosion, riots, civil commotion are covered as well. Damage that results from a windstorm, hail and the accidental discharge water is also covered.

Policy Limits

The replacement cost coverage on a homeowners policy has a dollar limit of $100,000, which is the most that a policyholder will receive if their home is destroyed. This is a fixed amount and will not increase even if it costs more to replace the home. However, Texas law requires insurance companies to pay the full amount on the policy. The full amount will need to be paid even if additional coverage is more than the replacement cost.

Insurance Rates

Rates for homeowners insurance in Texas are required by state law to be reasonable, adequate and not excessive or unfairly discriminatory. Factors that can affect the rates used for a homeowners insurance include the age and condition of the home. The replacement cost value and the building materials used for construction are also used as a factor. Other factors that affect the rate includes where an individual lives, their claims history and accessibility to fire protection.