Month: September 2011

Types of Texas Liability Insurance

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Reach The Minimum RequirementsLiability insurance coverage: What it is, and what it does

In Texas, if you drive a car you are required to have at least liability insurance coverage. This is so that if you’re deemed at fault in an accident, you can cover the other party’s damages without risking complete financial ruin for yourself. Minimum requirements for Texas liability insurance are $30,000 per injured person or a total of $60,000 per accident. Property damage liability coverage must be carried to at least a minimum of $25,000. This is often known as 30/60/25 coverage.

Two different types of liability insurance coverage

Bodily injury liability coverage

Liability insurance coverage is of two different types. The first is bodily injury liability coverage. With bodily injury liability insurance coverage, your insurance will cover the other party’s bodily injury costs to whatever level you have established in your policy, which is $30,000 per person or $60,000 per accident minimum. What this means is that if you’re at fault in an accident for the other person’s injuries, your insurance policy will cover the cost of those injuries up to the level carried. Examples of the costs liability insurance covers are any medical costs related to injuries suffered by the other party, compensation for wages lost as a result of the accident, and, in worst case scenarios, funeral expenses for parties killed in the accident.

Property damage liability coverage

Property damage liability is the second type of liability insurance coverage required by Texas state law. Property damage includes the repair or replacement of any vehicles, landscaping, buildings, or other property that is damaged as a result of an accident you’re deemed at fault in. If you’re deemed at fault in an accident, your insurance will cover you for property damage based upon the amounts you have established in your policy, which is at least a minimum of $25,000.

Texas Homeowners Insurance Requirements

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Gather RequirementsTexas homeowners insurance plans give residents in the state plenty of versatility for finding the right plan for their needs. Whether you are looking for Ft. Worth homeowners insurance, Dallas homeowners insurance, or Austin homeowners insurance, you can find all the fundamental information you need to know before purchasing Texas home insurance right in the answers to the following three questions.

What kinds of Texas home insurance coverage plans are available?

Although some residents of Texas choose homeowners insurance that covers just the home, there are plenty of other insurance coverage plans to consider to protect all of your property in case of an accident. For example, you can choose a dwelling insurance policy, which pays for structures of the home that are not attached such as fences, garages, storage sheds, etc. You can also cover personal property, liability, medical payments, and loss of use through Texas home insurance.

What are the different types of policies that Texas insurance companies offer?

Texas home insurance companies carry five basic policies that cover all of your homeowners insurance needs. The five basic policies include HO-A policies, HO-A amended policies, HO-B policies, HO-C policies, and alternative policies. The further the letter is in the alphabet, the better the coverage. Alternative policies vary depending on which Texas insurance company you purchased it from, so be sure to double check your policy information.

What is the difference between the homeowners insurance terms “replacement value” and “actual cash value?”

Replacement value is when your Texas insurance plan covers the cost of replacing whatever was damaged in the accident– from the home itself to the property inside. Actual cash value is when your Texas homeowners insurance pays for the price of your property minus the depreciation in value. For example, your laptop computer may have cost you $1,500 at the time, but may only be worth $800 by the time it was damaged. Because of this, many people prefer replacement value plans for their Texas home insurance.

Four Costly Insurance Mistakes

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Gain Knowledge on InsuranceHome and car insurance are necessary investments that protect you from a total loss in the event of accident, natural disaster, or theft. Researching and buying insurance, however, requires the purchaser to pay close attention to several facts in order to avoid making some costly insurance mistakes. Here are some of the most common of these errors and their consequences:

  1. Buying Inadequate Insurance — Premium costs decrease in proportion to a decrease in the amount of coverage that you actually buy. Yet while you might save on premium costs, not having enough insurance means that you will not have enough in a payout to cover replacement and repair costs should a claim be necessary. Unless your annual premium costs are more than what the total payout would be for a car insurance claim, for example, you should carry more than basic coverage.
  2. Considering Premium Costs Alone — In comparing two policies, you will often find that the premium costs for one company’s policy are much less than for another company’s policy that offers the same coverage. If the cheaper company, however, does not have a good reputation, you may never see a payout if you make a claim. So be sure to consider the insurance company’s reputation in addition to the cost for the coverage.
  3. Choosing Low Deductibles — The lowest deductibles for home and automobile coverage may seem attractive, but premium costs increase as your deductible goes down. You can save a lot of money every year by choosing high deductibles for your policy, but just make sure that you have enough money to cover these deductibles in the event of a loss.
  4. Filling Out Insurance Applications Incompletely — If you have many add-ons that make your home or car a lower risk to the insurance company for coverage, then make sure to include them on your application. Air bags, car alarms, home alarms, fire extinguishers, and so forth result in lower premiums.

3 Things You Should Know Prior to Buying Texas Homeowners Insurance

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There are many things you should know before buying Texas Homeowners Insurance. Everyone is probably curious about the price they will pay and the amount of coverage they need, but for this article, we will tell you three things you might not realize about Texas homeowners insurance.

  1. How much will your Texas homeowners policy pay out? A Texas homeowners policy will pay out only up to the maximum limits of the policy. If you insure your home for $150,000 and it is destroyed by a tornado, the most you can collect to repair it is $150,000. If it actually will cost $200,000 to repair or replace, you are liable for the $50,000 difference. Therefore, you should seek out enough insurance coverage to be able to repair or replace your home and its contents at today’s current market prices. The one exception to this rule is if your house is destroyed by fire. In that case, Texas law requires the insurance company to pay the full amount to replace the home even if it exceeds the limits set by your homeowners policy.
  2. You need to insure your Texas home for at least 80% of the replacement cost. If your house is damaged but not destroyed, your Texas homeowners insurance policy will only pay a fraction of the total loss that you claim. Even if your house was insured for $100,000 and you suffered $30,000 in actual damage, if the replacement cost for your entire house is $200,000, you will have a very difficult time getting the insurance company to pay the complete amount for the repair.
  3. Personal property coverage may be inadequate. If you only have personal property coverage and not replacement cost coverage, insurance will only pay out the cash value of the covered claim. The cash value is the replacement cost of the property less the depreciation on that property. Things like furniture, bedding, and appliances rapidly depreciate even though they may be in perfectly good condition. If you have a bunch of five year-old furniture and it gets destroyed or stolen, you may only get about 25% of what those items cost when you bought them new. With replacement coverage, you will get a new mattress, new furniture, and new appliances at no cost to you. Replacement coverage is more expensive, but it also is much better coverage.

Getting the Right Texas Insurance Coverage for Your Home

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Made Easy HereIf you live in Texas, you may think that homeowners’ insurance policies are “one-size-fits-all,” but you’d be wrong. The type of policy you need depends on several factors:

Location

Texas has desert, prairie, and coastline areas. Each of these areas has its own weather challenges and other hazards, any or all of which may affect the type of coverage you need, how much it’s going to cost you, and how much you’ll need. For example, if you live in a coastal area, you’re at greater risk of tropical storms or hurricanes, while if you live in desert areas or rural areas without ready access to fire protection, you may have to have extra fire protection coverage because you may be exposed to lightning storms, drought, and resulting wildfire.

Crime rate

In addition to nature-related risks, your location also plays a part in how safe your home is from vandalism, theft, or other property damage. If you live in a rural location, you’re likely less vulnerable to property crime as compared to an urban location with a higher crime rate.

Ready access to police and fire protection

If you live in a rural area that doesn’t have ready access to police or fire protection, you may need more comprehensive insurance as compared to someone who lives closer to police and fire protection.

Building materials

The materials from which your home is built determine how much and the kind of insurance you’ll need, too. The better the quality of the materials, the lower your insurance costs.

Which insurance is right for you?

Choose your policy based upon your home’s location and quality of materials. It’s not going to do much good, for example, if you buy a policy with special hurricane coverage when what you really need is coverage that protects you in the event of wildfires. Take a look at your current circumstances and location, and then choose a policy from a reputable company that will protect you in the event of disaster.

How to Fireproof Your Home

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A fire can damage absolutely everything you own, from interior to exterior, bringing your home down to a pile of ash. However, a fire can have devastating and damaging effects on more than just your home, as a large number of accidental deaths throughout the world are from fires.

Regardless of whether a fire is accidental or intentional, the effects of such are no different — and the fire moves just as quickly, leaving it almost impossible to control. Here are a four of the best ways to help fireproof your home and minimize the damage should a fire find its way into your home:

  • Install and Check Fire Detectors/Smoke Alarms: This is the absolute first step in fire prevention. Make sure you have, at minimum, one smoke alarm on each floor of the home. In addition, you should make sure to have one in the kitchen and one right outside your bedroom. You will want to check them often to ensure they are still working. The batteries should be changed at least twice per year.
  • Ensure There Are No Overloaded Electrical Circuits: Get rid of any old extension cords, and do not chain cords together, as the more electricity running through those cords, the more likely they are to catch fire. Also, don’t overload any electrical circuits within the home. Don’t plug 10 different items into an outlet with a power strip as this is an accident waiting to happen — or in this case, a fire waiting to happen. Further, never leave any appliances on while you are sleeping or when you leave the home.
  • Keep the Stove Clean: Kitchen fires are known for nearly 90 percent of houses that go up into flames. It is vital that you keep the stove itself clean at all times as well as the area surrounding it. Never leave food unattended with the burner on. Never place the skillet or pot handles to the outside where they can easily be knocked over.
  • Keep the Area Surrounding You Picked Up: While you may have the inside of your home fireproofed, that doesn’t mean you are clear of the potential for fires. You should keep the surrounding area of your home picked up, including leaves and brush. It is also important to keep your grass mowed and not to let it become overgrown. Field fires (whether you live in a field or not, grass fires are the same) move very rapidly and are extremely hard to keep under control.

By following the above information, you will significantly minimize the risk of your house catching on fire. Accordingly, you’ll reduce the chances that you will have to call your home insurance company and file an insurance claim.

How to Understand Texas Insurance

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Know BetterIs insurance mandatory?

Texas homeowners insurance is not mandatory, although it’s highly, highly recommended, for obvious reasons. You don’t want to have a disaster and be left homeless and possession-less; Texas homeowner’s insurance will help protect you from that.

Texas auto insurance is mandatory, however. In other words, if you own and drive a car, you’ll need to have insurance that’s at least liability coverage.

Minimums and requirements for car insurance

  • 30/60/25 liability coverage: In Texas, liability coverage minimums are $30,000 minimum for bodily injury per person or up to a total of $60,000 per accident, plus $25,000 minimum for property damage (also known as 30/60/25 coverage).
  • Carry proof of insurance with you: You must carry proof of insurance with you in your vehicle. If you’re found to be without proper coverage, you can be fined from $175 to $350 with your first offense; your second offense will be more costly (from $300 to $1,000); and you can have your license suspended and/or have your vehicle impounded if you’re caught a third time without insurance.
  • If you have a rental car: If you have a rental car, you also have to carry the minimum liability coverage as required in Texas (30/60/25). Your policy probably already provides rental car coverage, especially if it’s a comprehensive policy. If not, buy appropriate insurance for your rental car before you drive if you don’t already have it.

Requirements for homeowners insurance

Again, although it’s not absolutely necessary for you to have homeowners insurance, you should have it so that you are protected if you’re in a disaster. Before you buy a policy, make sure you check the insurance company’s reputation, speed of claims resolution, and customer service satisfaction. Policy price is important, but customer service is even more important. In addition, make sure you buy enough insurance to repair or replace items at replacement cost, not current value cost. If you don’t, you could find yourself without enough money to repair/rebuild your home or replace your possessions as necessary.

Overcoming High Prices on Auto Insurance for High Risk Drivers

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Be A Smart DriverWhen car insurance companies consider the premium amount they will charge an individual driver, they do not treat every driver the same. Some drivers, including those under the age of 25 and those with a history of many accidents and/or tickets are at a greater risk of getting into an accident. High-risk drivers are generally required to pay higher premiums than other drivers. Yet there are ways that even high-risk drivers can pay less for car insurance, so here is how a high-risk driver can go about overcoming high prices on his or her insurance premiums.

  1. Improve Your Credit Score — Since automobile insurers take an individual driver’s credit score into account when deciding how much to charge the driver for his or her insurance, you should do whatever you can to get a high score. Pay your bills on time, make sure that there are not inaccuracies on your credit report, and so forth to improve your score and save money on insurance premiums.
  2. Shop Around for Insurance — The worst thing you can do as a high-risk driver is not to compare several auto insurance companies when you are looking for coverage. Even though you may still have to pay more than a low-risk driver, considering several different auto insurance companies and quotes will help you find the lowest cost provider and overcome high prices for car insurance.
  3. Look into Policy Discounts — Insurance companies typically offer certain discounts even to high-risk drivers that meet certain criteria. Young drivers, for example, can often get a discount on their premiums when they maintain a high GPA. Ask your insurer about other possible discounts, which may include bundling your car insurance and home insurance with the same insurer, discounts for insuring multiple vehicles, and more.

Texas Homeowners Insurance Made Easy

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Residents of the state of Texas who are in the market for home insurance need to have a basic understanding of the different kind of Texas homeowners insurance policies so that they get adequate coverage for their dwelling and possessions. If you live in Texas, be sure to keep the differences between the following three types of homeowners insurance policies in mind. That way, you will not have many headaches later on and will also be able to sleep well because you know that any loss or damage will be covered.

1. HO-A Policies — The HO-A policy provides the most limited coverage of the three Texas homeowners insurance options, but it is also the least expensive. These may be good policies for those who have a good amount of money in their savings accounts and can afford to pay some of the repair costs after a disaster or who are able to pay replacement costs for stolen contents. You may have to pay more out of pocket in the event of a loss since you will only receive “actual cash value” settlements that do not take into account labor costs and other expenses to rebuild, but you will save money each month on your premiums.

2. HO-B Policies — HO-B policies offer better coverage because they will pay the actual cost it takes to rebuild a home. That is, you will get a settlement that not only covers materials, but it will also cover the labor involved in using these materials to repair or reconstruct a damaged home.

3. HO-C Policies — The most expensive home insurance policies in Texas are those that cover damage that is caused by nearly any event imaginable. These are the HO-C policies, which also offer actual replacement costs just like the HO-B policies, but they also have fewer limitations than HO-B coverage.

Commonly Overlooked Insurance Discounts

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Grab Those DiscountsDrivers and residents may be surprised by the car or home insurance discounts they already qualify for or could qualify for with little effort. Insurance can be less expensive when drivers and residents do not overlook discount opportunities.

Discounts for Good Students

Insured parties who have not yet established a history of safe homeownership or safe driving practices have another opportunity to demonstrate a high-level of responsibility: Good grades. Students with good grades can qualify for a good student discount on car insurance rates.

Discounts for Driver’s Education

Completing extra driver’s education can help experienced drivers reduce points on their licenses or help new drivers gain experience. Driver’s education teaches the safe practices that reduce accidents. Completing driver’s education courses approved by insurance providers can result in discounted rates.

Discounts for Reduced Risk

Insurance companies look for signs of responsibility and low risk, which is why they offer good student discounts and discounts for supplemental driver’s education. They also reduce rates for other indicators of responsibility and low risk, such as adequate alarm systems on vehicles and homes that deter theft. Insurance shoppers should inquire if there are any actions they can take to update their vehicles and homes and reduce risk and lower their rates.

Discounts for Multiple Policies

Insured parties often purchase different types of insurance separately. However, purchasing car and home insurance through the same provider can result in lower rates for the combined policies when insurance companies offer discounts for multiple policies.

Insurance can be expensive, but drivers receive great deals when they are able to take advantage of good student discounts and drivers’ education discounts. Drivers and residents can also receive lower rates for reducing their risks and holding their various types of insurance policies through one provider.