Before You Renew: Common Gaps in Texas Homeowners Insurance Coverage

Your homeowners insurance renewal is coming up. It is tempting to just pay it and forget it. Before you do, take a few minutes to check for some common coverage gaps we see every day. A small adjustment now can prevent a massive financial headache later.

The Foundation Exclusion

In Texas, foundation and slab problems are common because of our shifting clay soils. Most standard HO-A and HO-3 policies, however, limit or completely exclude coverage for foundation damage unless it is caused by a covered peril, like an underground plumbing leak. Simple settling is almost never covered.

Look for a specific endorsement called "Foundation and Water Damage" or similar wording. It adds back coverage for foundation repair, but it usually comes with its own separate, higher deductible. For a few hundred dollars a year, it is often worth it.

Wind and Hail Deductibles

Many policies, especially in coastal areas like Houston or anywhere in the Texas Windstorm Insurance Association (TWIA) designated catastrophe areas, have a separate, higher deductible for wind and hail damage. This is often a percentage of your home's insured value, not a flat dollar amount.

A 2% deductible on a $400,000 home means you pay the first $8,000 of a roof claim out-of-pocket. We see many homeowners who are surprised by this after a storm. Check your declarations page for a "Wind/Hail Deductible" or "Named Storm Deductible" and make sure you are comfortable with that number. Sometimes you can pay a higher premium for a lower, more manageable deductible.

Insufficient "Other Structures" Coverage

Your policy’s "Other Structures" coverage (Coverage B) protects things not attached to your house, like a detached garage, shed, or fence. This is typically set at 10% of your main dwelling coverage (Coverage A) by default. If you have a $300,000 house, you get $30,000 for other structures.

With the cost of lumber and labor, that $30,000 does not go as far as it used to. If you have a large detached garage, an expensive fence, or a new workshop, that default limit might not be enough to rebuild it. You can usually increase this limit for a small additional premium.

Water Backup vs. Flood Damage

This is one of the most misunderstood aspects of homeowners insurance. A standard policy does not cover flood damage (rising surface water). It also may not cover damage from a backed-up sewer or drain line unless you have a specific endorsement.

• **Water Backup Coverage:** This is an add-on for when a sewer line backs up into your house. It is inexpensive and highly recommended. A typical limit is $5,000 or $10,000.
• **Flood Insurance:** This is a separate policy for water that comes from outside, like an overflowing creek or hurricane surge. It is not included in your homeowners policy.

Do not assume you are covered for water damage. You need to verify you have both water backup coverage and a separate flood policy to be truly protected.

Before you simply renew your policy, let us take a look. Upload your current declarations page to our PolicyPal™ tool, and we can give you a straightforward review to make sure you are not paying for a policy with holes in it.