A
Actual Cash Value (ACV)
The settlement basis some home policies use for roof claims and personal property. ACV is replacement cost minus depreciation at the time of loss. Texas roof claims increasingly settle on ACV under roof payment schedule endorsements, with depreciation scheduled by roof age. Personal property under HO-3 settles at ACV unless RCV is endorsed.
Why It MattersA Houston household with an aging composition shingle roof under an ACV roof endorsement can see settlement values significantly below replacement cost. TDI market and complaint materials track the shift from RCV to ACV-scheduled roof settlement across Texas carriers since 2022. The wind/hail deductible is applied first, then ACV depreciation, then the net check arrives.
Charles in Plain EnglishACV pays today's value minus depreciation. RCV pays to put it back.
SourceTexas Department of Insurance, Homeowners Policy Guide
RelatedReplacement Cost Value (RCV)DepreciationRoof Payment Schedule
Adjuster
The person assigned to evaluate, negotiate, and settle the home claim. Texas recognizes three categories. Company adjusters work for the carrier. Independent adjusters contract with the carrier. Public adjusters are licensed by the Texas Department of Insurance and represent the policyholder. Public adjusters typically charge a percentage of the settlement.
Why It MattersA Houston household with a significant home claim has the right to hire a Texas-licensed public adjuster to negotiate independently of the carrier's adjuster. The Texas Department of Insurance maintains a roster of licensed Texas public adjusters and the fee disclosure rules. Most home claims do not need a public adjuster, but significant Harvey-era and Beryl-era claims have benefited from independent representation.
Charles in Plain EnglishCompany adjuster, independent adjuster, public adjuster. Texas licenses all three.
SourceTexas Department of Insurance, Public Adjuster Information
RelatedPublic AdjusterProof of LossClaim
All Other Perils Deductible
The deductible that applies to any covered home loss except wind, hail, hurricane, or named storm. Common Texas AOP deductibles are 1,000 to 5,000 dollars. AOP applies to losses from fire, theft, water damage, vandalism, falling objects, and most other covered perils. Texas home policies typically use a flat-dollar AOP and a separate percentage-based Wind/Hail deductible.
Why It MattersA Houston household with a 1,000-dollar AOP and a 1 percent Wind/Hail deductible can face very different out-of-pocket exposure depending on the loss cause. A 25,000-dollar kitchen fire applies the 1,000-dollar AOP. A 25,000-dollar hail roof claim applies the percentage Wind/Hail deductible, which on a 500,000-dollar home is 5,000 dollars. TDI consumer materials encourage households to read both deductibles at every renewal.
Charles in Plain EnglishWind/Hail has its own deductible. AOP is everything else.
SourceTexas Department of Insurance, Homeowners Deductibles
RelatedWind/Hail DeductibleHurricane DeductibleDeductible
Animal Liability Exclusion
A carrier endorsement or underwriting position that removes liability coverage for bites, attacks, or injuries caused by specific dog breeds, exotic animals, or animals with a prior bite history. Texas does not statutorily restrict breed-based exclusions. Carrier breed lists vary, with pit bulls, rottweilers, German shepherds, and Akitas commonly excluded by some Texas-active carriers.
Why It MattersA Houston household with a breed on the carrier's exclusion list faces no liability coverage if the dog causes injury. TDI consumer materials encourage households to disclose all dogs at application and to confirm coverage in writing. Some carriers including Chubb, Cincinnati, and PURE write broader animal coverage. Other carriers exclude entirely. The policy form decides, not Texas law.
Charles in Plain EnglishTexas does not name the breed. Your home carrier might.
SourceTexas Department of Insurance, Homeowners Liability Coverage
RelatedCoverage E (Personal Liability)UnderwritingEndorsement
C
Cancellation
The termination of a home policy mid-term by the carrier or the policyholder. Texas Insurance Code limits carrier mid-term cancellation after the first 60 days to specific reasons including non-payment, material misrepresentation, fraud, and substantial increase in risk. Carrier-initiated cancellation requires written notice with statutorily specified notice periods.
Why It MattersA Houston household notified of mid-term home cancellation has specific rights under Texas Insurance Code and can dispute through the Texas Department of Insurance complaint process. Cancellation history affects future home placement and can result in non-standard or Texas FAIR Plan placement. TDI market and complaint materials track cancellation complaints and publishes data on Texas-active carrier cancellation patterns.
Charles in Plain EnglishMid-term cancellation has specific Texas rules. Non-renewal has different ones.
SourceTexas Department of Insurance, Cancellation Rules
RelatedNon-RenewalLapseUnderwriting
Claim
A request for payment under the home policy following a covered loss. Texas Insurance Code specifies a defined timeline for home claims including acknowledgment, investigation, coverage determination, and settlement. The claim file becomes the basis for any subsequent dispute or appraisal under the policy's appraisal clause.
Why It MattersA Houston home claim should be documented from the first day with photographs, receipts, repair estimates, and written communication with the adjuster. TDI consumer materials recommend written confirmation of coverage decisions and publish a Texas home claim timeline guide. Filing a claim affects the CLUE report, which subsequent carriers read during home placement.
Charles in Plain EnglishA claim is a request. A paid claim is a settlement.
SourceTexas Department of Insurance, Home Claim Process
RelatedAdjusterProof of LossCLUE Report
Claim-Free Discount
A premium discount applied when the household has not filed a home claim in a defined lookback period, typically three to five years. The discount typically ranges from 5 to 20 percent on the home premium. A claim within the lookback period typically resets the clock and removes the discount until eligibility is reestablished.
Why It MattersA Houston household that files a small claim (a 4,000-dollar water damage claim with a 2,000-dollar deductible netting a 2,000-dollar payment) can lose a claim-free discount worth 200 to 500 dollars per year for several years. TDI consumer materials recommend households calculate the long-term premium impact before filing a small home claim. Sometimes paying out of pocket protects the discount.
Charles in Plain EnglishFive years claim-free earns the discount. One claim usually resets the clock.
RelatedPremiumCLUE ReportLoyalty Discount
CLUE Report
The Comprehensive Loss Underwriting Exchange report. A consumer disclosure report maintained by LexisNexis that lists home and auto claim history for the household and property over the prior seven years. Texas-active home carriers read the CLUE report at every new application and at most renewals. CLUE entries affect both home and auto rate offers.
Why It MattersA Houston household closing on a new home can be quoted significantly higher rates if the property has prior CLUE entries from a previous owner, particularly for water damage, fire, or theft. TDI consumer materials encourage prospective home buyers to request a CLUE report on the property before closing. CLUE errors do happen and require formal correction through LexisNexis.
Charles in Plain EnglishCLUE is the household claim history. Carriers read it before they price.
SourceTexas Department of Insurance, CLUE Report Information
RelatedClaimUnderwritingPremium
Coinsurance
A replacement cost condition that can reduce a partial home claim when the dwelling limit is too low. Most replacement cost policies expect the dwelling to be insured to at least eighty percent of the home's replacement cost at the time of loss. If the limit falls below that threshold, the carrier can reduce the claim payment in proportion to the amount of insurance carried.
Why It MattersA Houston homeowner with a paid off house may be tempted to lower Coverage A because there is no lender watching the policy anymore. That can save a little premium and create a much larger claim gap. A home with a rebuild cost of 500,000 dollars generally needs at least 400,000 dollars of dwelling coverage to avoid the eighty percent replacement cost penalty on a partial loss.
Charles in Plain EnglishDo not lower the dwelling limit just because the mortgage is gone. The claim check still reads the contract.
SourceTexas Department of Insurance, Building Costs and Home Insurance
RelatedCoverage A (Dwelling)Replacement Cost Value (RCV)Deductible
Cosmetic Damage Exclusion
A home policy exclusion or endorsement that limits or removes coverage for damage that affects appearance but does not impair the function of the affected item. Most commonly applied to roof hail damage where dents do not cause leaks. Texas carriers increasingly add cosmetic damage exclusions to roof coverage, particularly on aging composition shingle roofs.
Why It MattersA Houston household with a cosmetic damage exclusion on the roof can see a clearly dented post-hail roof denied for replacement because the dents do not leak. TDI consumer materials warn that cosmetic damage exclusions are increasingly common on Texas home policies. The exclusion language is on the dec page endorsement list and worth reading before renewal.
Charles in Plain EnglishCosmetic damage is the dent that does not leak. The carrier decides what is cosmetic.
SourceTexas Department of Insurance, Homeowners Roof Coverage
RelatedRoof Payment ScheduleRoof Surfacing EndorsementWind/Hail Deductible
Coverage A (Dwelling)
The primary home coverage that pays for physical damage to the dwelling structure, including walls, roof, foundation, built-in cabinets, plumbing, electrical systems, and permanently installed appliances. Coverage A is the foundation amount on which Coverages B, C, D, and most sublimits are calculated. Most Texas home policies set Coverages B, C, and D at percentages of Coverage A.
Why It MattersA Houston household with Coverage A set below current replacement cost faces underinsurance exposure on every covered loss, not just total loss. Texas construction costs have risen significantly since 2020, and a Coverage A amount set in 2018 may be 20 to 35 percent below current replacement value. TDI consumer materials recommend households obtain a current replacement-cost calculation at every renewal.
Charles in Plain EnglishCoverage A pays for the house. Everything else points back to it.
SourceTexas Department of Insurance, Homeowners Coverage Guide
RelatedCoverage B (Other Structures)Coverage C (Personal Property)Extended Replacement Cost
Coverage B (Other Structures)
The home coverage that pays for physical damage to structures on the property that are not attached to the main dwelling, including detached garages, sheds, gazebos, pool houses, fences, mailbox structures, and detached workshop buildings. Coverage B is typically set at 10 percent of Coverage A by default and can be increased by endorsement.
Why It MattersA Houston household with a substantial detached garage, pool house, or outbuilding may need to increase Coverage B above the default 10 percent. A detached garage worth 60,000 dollars on a home with 500,000-dollar Coverage A has 50,000 dollars of Coverage B by default, which is inadequate. TDI consumer materials recommend households evaluate Coverage B against the actual value of detached structures.
Charles in Plain EnglishDetached garage, shed, fence. Coverage B at 10 percent of Coverage A.
SourceTexas Department of Insurance, Homeowners Coverage Guide
RelatedCoverage A (Dwelling)HO-3 PolicyEndorsement
Coverage C (Personal Property)
The home coverage that pays for damage to personal property inside the dwelling, including furniture, clothing, electronics, appliances not permanently installed, and most other contents. Coverage C is typically 50 to 75 percent of Coverage A by default. Personal property settles at ACV on HO-3 unless RCV is endorsed. Specific categories (jewelry, art, collectibles, firearms, cash) have sublimits.
Why It MattersA Houston household with 50,000 dollars in scheduled jewelry under a 250,000 dollar Coverage C limit only has 1,500 dollars covered on jewelry by default sublimit, with the rest needing to be specifically scheduled. TDI consumer materials recommend households review Coverage C sublimits annually and schedule any high-value items. Sublimits are the most-missed Texas home coverage gap.
Charles in Plain EnglishCoverage C pays for the contents. Read the sublimits.
SourceTexas Department of Insurance, Personal Property Coverage
RelatedSublimitScheduled Personal PropertyCoverage A (Dwelling)
Coverage D (Loss of Use)
The home coverage that pays for additional living expenses while the dwelling is uninhabitable due to a covered loss, including hotel, short-term rental, restaurant meals above normal grocery costs, pet boarding, and laundry. Coverage D is typically 20 to 30 percent of Coverage A and applies for the time reasonably necessary to repair or replace the dwelling.
Why It MattersA Houston household displaced for six to nine months after a significant covered loss (fire, major water damage, tornado) can exhaust default Coverage D. Hurricane Harvey produced multi-month Coverage D claims across the Houston area. TDI consumer materials encourage households to confirm Coverage D adequacy when the dwelling is large enough that hotel and short-term rental costs would be high. Coverage D does not apply to NFIP flood claims.
Charles in Plain EnglishCoverage D pays for the hotel. NFIP does not.
SourceTexas Department of Insurance, Loss of Use Coverage
RelatedCoverage A (Dwelling)ClaimEndorsement
Coverage E (Personal Liability)
The home coverage that pays for bodily injury and property damage caused to others by the insured, anywhere in the world, subject to policy limits and exclusions. Typical Coverage E limits range from 100,000 to 500,000 dollars per occurrence. Defense costs are paid in addition to the limit. Coverage E is the underlying layer that personal umbrella policies sit above.
Why It MattersCoverage E underlying limits must meet the personal umbrella's underlying requirement, typically 300,000 dollars on home liability. A Houston household that drops Coverage E below the umbrella requirement creates a gap. TDI consumer materials recommend Coverage E limits of at least 300,000 dollars and ideally 500,000 dollars for households with assets. Coverage E is typically inexpensive to increase.
Charles in Plain EnglishCoverage E protects the household. Umbrella protects what Coverage E cannot.
SourceTexas Department of Insurance, Liability Coverage Guide
RelatedCoverage F (Medical Payments)Bodily InjuryAnimal Liability Exclusion
Coverage F (Medical Payments)
The home coverage that pays for reasonable medical expenses incurred by guests on the premises within three years of an accident, regardless of fault. Coverage F is typically 1,000 to 5,000 dollars per person. Coverage F does not apply to the named insured or regular residents of the household, only to guests.
Why It MattersCoverage F is the goodwill coverage that avoids small lawsuits over guest injuries. A Houston household with a guest who falls on the patio and incurs a 2,500-dollar ER bill can have Coverage F pay the bill without a Coverage E liability claim. TDI consumer materials encourage households to evaluate Coverage F limits against typical Houston-area emergency room and urgent care costs.
Charles in Plain EnglishMed Pay pays for the guest. Section E pays for the lawsuit.
SourceTexas Department of Insurance, Medical Payments Coverage
RelatedCoverage E (Personal Liability)Bodily InjuryClaim
D
Declarations Page (Dec Page)
The summary front page of the home policy that identifies the named insured, the property address, the coverages and limits, the deductibles, the premium, the policy effective and expiration dates, the endorsements in force, and the mortgagee. The dec page is the most important single document in any home policy review.
Why It MattersA Houston household renewal review begins and ends with the dec page. Two dec pages side by side reveal limit differences, deductible differences, endorsement differences, and premium changes. TDI consumer materials recommend households review the dec page at every renewal cycle. Most home coverage misunderstandings are visible on the dec page if read line by line.
Charles in Plain EnglishThe dec page is the policy summary. The contract behind it is what gets paid.
SourceTexas Department of Insurance, Understanding Your Home Policy
RelatedEndorsementRenewalPremium
Deductible
The amount the policyholder pays out of pocket before home coverage begins paying. Texas home policies typically apply different deductibles to different perils. An All Other Perils (AOP) deductible expressed in dollars, a Wind/Hail deductible expressed as a percentage of Coverage A, and sometimes a separate Hurricane or Named Storm deductible.
Why It MattersA Houston household with a 1,000-dollar AOP deductible, a 1 percent Wind/Hail deductible, and a 2 percent Hurricane deductible on a 600,000-dollar home faces very different out-of-pocket exposure depending on the loss. AOP applies a 1,000-dollar deductible. Wind/Hail applies 6,000 dollars. Hurricane applies 12,000 dollars. TDI consumer materials encourage households to read all three deductibles at every renewal.
Charles in Plain EnglishThe deductible is your share of the loss. Texas wind/hail uses a percentage, not a dollar.
SourceTexas Department of Insurance, Homeowners Deductibles
RelatedAll Other Perils DeductibleWind/Hail DeductibleHurricane Deductible
Depreciation
The reduction in value of property over time due to age, wear, obsolescence, or other factors. Home claim settlements may apply depreciation in two ways. ACV settlements deduct depreciation at the time of loss. RCV settlements pay full replacement cost but may withhold recoverable depreciation until repairs are documented.
Why It MattersA Houston household with a 25-year-old composition shingle roof claiming under an ACV roof endorsement can see substantial depreciation deducted from the settlement. TDI consumer materials encourage households to understand how depreciation is calculated on their specific home policy. Some carriers use scheduled depreciation. Others use adjuster-determined depreciation. Read the form.
Charles in Plain EnglishDepreciation is the gap between RCV and ACV. Recoverable depreciation closes it.
SourceTexas Department of Insurance, Depreciation in Home Claims
RelatedActual Cash Value (ACV)Recoverable DepreciationRoof Payment Schedule
E
Effective Date
The specific date and time at which home coverage begins under the policy. The effective date is shown on the dec page and controls when the policy responds to losses. A loss occurring before the effective date is not covered, even if reported after. The effective date on a renewal is typically immediately after the prior policy expires, ensuring continuous coverage.
Why It MattersA Houston household closing on a new home should confirm the home policy effective date matches or precedes the closing date. A one-day gap between prior policy expiration and new policy effective date creates a coverage gap that can affect mortgage funding and any losses during the gap. TDI consumer materials encourage households to verify effective dates at every binder issuance.
Charles in Plain EnglishEffective date controls coverage start. Read it twice.
SourceTexas Department of Insurance, Home Policy Documents
RelatedDeclarations Page (Dec Page)RenewalLapse
Endorsement
A document that modifies the standard home policy by adding, removing, or amending coverage. Common Texas home endorsements include scheduled personal property, water backup, equipment breakdown, service line, extended replacement cost, mold coverage above sublimit, roof surfacing options, and animal liability buy-backs. Endorsements have their own premium, conditions, and exclusions.
Why It MattersA Houston household reviewing the dec page should specifically read the endorsement list, not just the coverage summary. An endorsement removing or restricting coverage (cosmetic damage exclusion, scheduled roof depreciation, animal liability exclusion) is as consequential as one adding coverage. TDI consumer materials encourage households to obtain the full text of any endorsement before signing.
Charles in Plain EnglishEndorsements modify the home policy. They never speak for themselves.
SourceTexas Department of Insurance, Home Endorsements
RelatedDeclarations Page (Dec Page)Scheduled Personal PropertyWater Backup Endorsement
Equipment Breakdown Coverage
An endorsement that pays for damage to home mechanical and electrical systems from internal breakdown including air conditioning, water heater, pool pump, well pump, electrical panel, and appliance failures. Equipment breakdown covers losses excluded under the base home policy because they are not sudden accidental external causes.
Why It MattersHouston households running air conditioning year-round face elevated equipment breakdown exposure. A 12,000-dollar AC system failure is not covered by the base home policy because it is not a sudden accidental external cause. Equipment breakdown endorsement (typically 30 to 80 dollars annually) pays. TDI consumer materials reference equipment breakdown as a high-value Houston-area endorsement.
Charles in Plain EnglishEquipment breakdown covers what comprehensive does not. AC, pool pump, water heater.
SourceTexas Department of Insurance, Equipment Breakdown Coverage
RelatedEndorsementService Line CoverageCoverage A (Dwelling)
Extended Replacement Cost
An endorsement that pays up to a specified percentage above Coverage A (typically 25 or 50 percent) for total loss replacement when the actual rebuild cost exceeds the Coverage A limit. Extended Replacement Cost provides a cushion when construction costs spike unexpectedly or when Coverage A was set slightly below current replacement.
Why It MattersHouston construction costs rose 20 to 35 percent between 2020 and 2024 due to lumber, labor, and supply-chain factors. A household with Coverage A set in 2019 and a total loss in 2024 may need rebuild funds well above the stated Coverage A. Extended Replacement Cost at 25 percent on a 500,000-dollar dwelling adds 125,000 dollars of headroom. TDI consumer materials recommend Extended Replacement Cost where available.
Charles in Plain EnglishExtended RCV adds 25 percent above Coverage A. In case rebuild costs jumped.
SourceTexas Department of Insurance, Extended Replacement Cost Guide
RelatedReplacement Cost Value (RCV)Guaranteed Replacement CostCoverage A (Dwelling)
H
HO-3 Policy
The most common Texas home policy form. HO-3 provides open peril coverage on the dwelling (all causes covered unless specifically excluded) and named peril coverage on personal property (only causes specifically listed are covered). HO-3 is the standard form for owner-occupied single-family homes in Texas.
Why It MattersA Houston household with an HO-3 should understand the asymmetric coverage structure. The dwelling has broader coverage than the contents. A specific peril damaging both the dwelling and personal property can produce a coverage gap on personal property. TDI consumer materials recommend households consider HO-5 upgrade where available for households with significant personal property.
Charles in Plain EnglishHO-3 covers the dwelling open peril. Personal property named peril.
SourceTexas Department of Insurance, Home Policy Forms
RelatedHO-5 PolicyHO-8 PolicyCoverage A (Dwelling)
HO-5 Policy
An upgraded home policy form. HO-5 provides open peril coverage on both the dwelling and personal property. The broader personal property coverage typically results in fewer claim disputes because the burden is on the carrier to prove an exclusion rather than on the policyholder to prove the loss matched a named peril. HO-5 premium is typically 5 to 15 percent higher than HO-3.
Why It MattersA Houston household with significant personal property (electronics, furniture, art, scheduled jewelry, collectibles) benefits from HO-5 broader coverage. TDI consumer materials encourage households with newer homes, higher contents values, or specific scheduled property to consider HO-5 placement where available. Some carriers may offer HO-5 in Texas, but availability depends on underwriting and current appetite.
Charles in Plain EnglishHO-5 is open peril both. Higher premium, fewer arguments.
SourceTexas Department of Insurance, Home Policy Forms
RelatedHO-3 PolicyCoverage C (Personal Property)Premium
HO-6 Policy (Condo)
The home policy form for owner-occupied condominium units. HO-6 covers the unit owner's interior improvements and personal property, plus liability and additional living expense. The condominium association's master policy covers the building shell and common elements separately. HO-6 fills the gap between the master policy and the unit owner's personal coverage need.
Why It MattersHouston condo owners frequently misunderstand the split between the association's master policy and their own HO-6. Improvements within the unit (upgraded flooring, custom built-ins, finished interiors, appliances), personal property, and liability are the unit owner's responsibility. TDI consumer materials encourage condo owners to obtain a copy of the association master policy declarations before placing HO-6 coverage.
Charles in Plain EnglishHO-6 is the condo policy. It covers what the association does not.
SourceTexas Department of Insurance, Condo Insurance Guide
RelatedHO-3 PolicyCoverage A (Dwelling)Coverage C (Personal Property)
HO-8 Policy
A home policy form for older homes where the replacement cost significantly exceeds the market value, typically because the home contains period-specific materials no longer in common production. HO-8 settles claims at functional replacement cost rather than full replacement cost, using modern equivalents rather than period-correct materials.
Why It MattersA Houston historic-district homeowner (Heights, Houston Heights, Eastwood, Riverside Terrace) may find that HO-3 or HO-5 coverage is unavailable or unaffordable because period-correct replacement costs exceed market value. HO-8 fills the gap at lower premium with functional replacement settlement. TDI consumer materials reference HO-8 for Texas historic homes. Texas FAIR Plan also writes HO-8.
Charles in Plain EnglishHO-8 is the older home form. Settled at functional replacement, not RCV.
SourceTexas Department of Insurance, HO-8 Policy Information
RelatedHO-3 PolicyTexas FAIR PlanReplacement Cost Value (RCV)
Hurricane Deductible
A separate deductible applied when the loss is caused by a named hurricane as declared by the National Hurricane Center. Texas coastal-county home policies typically apply a hurricane deductible of 1 to 5 percent of Coverage A, separate from and higher than the standard wind/hail deductible. The hurricane deductible activates when NHC issues a named-storm advisory affecting the property.
Why It MattersHouston households in coastal counties (Harris, Galveston, Brazoria, Fort Bend, Chambers) may have separate hurricane deductibles that apply only during named-storm events. A 2 percent hurricane deductible on a 600,000-dollar home is 12,000 dollars before any payment. Hurricane Beryl in July 2024 triggered hurricane deductibles across Houston households. TDI consumer materials encourage coastal households to confirm hurricane deductible specifics at every renewal.
Charles in Plain EnglishWind/Hail is the year-round deductible. Hurricane is the named-storm one.
SourceTexas Department of Insurance, Hurricane Deductibles
RelatedWind/Hail DeductibleNamed Storm DeductibleTexas Windstorm Insurance Association (TWIA)
I
Inflation Guard
An automatic policy adjustment that increases Coverage A annually (typically 2 to 6 percent) to keep pace with inflation in construction costs. Inflation guard is built into most Texas home policies as a default feature. The adjustment compounds annually unless the policyholder declines or unless Coverage A is manually reset at renewal.
Why It MattersHouston construction cost inflation from 2020 to 2024 ran 5 to 8 percent annually, exceeding most automatic inflation guard adjustments. A household relying solely on inflation guard may still be underinsured because the adjustment rate did not match actual cost inflation. TDI consumer materials recommend households obtain an actual replacement-cost calculation every two to three years and adjust Coverage A accordingly, in addition to the inflation guard.
Charles in Plain EnglishInflation guard adjusts Coverage A annually. 2 to 4 percent, automatically.
SourceTexas Department of Insurance, Coverage A Adequacy
RelatedCoverage A (Dwelling)Extended Replacement CostPremium
Inspection
A carrier-initiated property inspection conducted at new business issue, mid-term following specific events, or at renewal to verify the property's condition, identify hazards, and confirm the data on the application. Texas carriers commonly use Texas-licensed inspection firms or in-house field representatives. Inspections frequently include roof age, electrical panel type, plumbing material, and exterior condition.
Why It MattersA Houston household that receives an inspection notice should expect specific items to be evaluated including roof condition and age, electrical service panel brand (Federal Pacific, Zinsco, and Stab-Lok panels are commonly cited), plumbing material (galvanized and polybutylene are commonly cited), and visible exterior maintenance. TDI consumer materials encourage households to address inspection findings within the window provided to avoid non-renewal.
Charles in Plain EnglishThe carrier inspects before they renew. Sometimes after they pay.
SourceTexas Department of Insurance, Home Inspection Standards
RelatedTexas Inspection FormUnderwritingNon-Renewal
Insurance Score
A statistical score derived from credit-bureau data and used by home carriers as one rating factor. Texas law allows the use of insurance scores within specific rules and prohibits sole-reliance on credit data for adverse underwriting actions. TDI regulates how insurance scoring is implemented by Texas-licensed home carriers.
Why It MattersA Houston household with a thin credit file, a recent bankruptcy, or a credit-reporting error may receive higher home rates than the property and claim history alone would justify. Texas allows households to request a reasonable explanation when insurance scoring drives a higher rate. The Texas Department of Insurance maintains a complaint process for insurance scoring disputes. Improving credit can produce home premium reductions at renewal.
Charles in Plain EnglishCredit-based scoring affects the home rate. TDI regulates the inputs.
SourceTexas Department of Insurance, Insurance Scoring Rules
RelatedUnderwritingPremiumCLUE Report
M
Matching of Materials
A home claim issue where repair of damaged building materials results in a visible mismatch with undamaged materials (different brick lots, faded shingles, discontinued siding profiles, mismatched flooring). Some carriers pay to replace adjacent undamaged materials for matching. Some pay only for the damaged area. The endorsement language and Texas case law decide.
Why It MattersHouston households filing partial roof or siding claims frequently encounter matching disputes. Sun-faded shingles or discontinued brick lots cannot be exactly matched, and carriers may decline to replace adjacent undamaged sections. TDI market and complaint materials track matching of materials complaints. Some carriers including Chubb, Cincinnati, and Travelers offer broader matching provisions. The endorsement language on the dec page controls.
Charles in Plain EnglishBrick and shingle change colors over time. Matching is what the carrier may decline to do.
SourceTexas Department of Insurance, Home Claim Settlement
RelatedClaimRoof Surfacing EndorsementCosmetic Damage Exclusion
Mold Sublimit
A limit on mold-related home coverage. Texas Department of Insurance regulations cap mold remediation coverage at 5,000 to 10,000 dollars on most Texas home policies unless specifically endorsed higher. The mold sublimit applies to mold remediation, testing, and clearance. Mold-caused damage to other property may also be subject to the sublimit.
Why It MattersHouston humidity, slab leaks, water backups, and post-Harvey moisture exposure produce frequent mold claims. A Houston household with default mold coverage faces a 5,000 to 10,000-dollar cap that may be inadequate for significant mold remediation. TDI consumer materials recommend households evaluate mold buyback endorsements where available. Some carriers may offer higher mold limits by endorsement, depending on underwriting and current appetite.
Charles in Plain EnglishTDI capped Texas mold at 10,000 dollars. Endorsements buy more.
SourceTexas Department of Insurance, Mold Coverage Rules
RelatedSublimitEndorsementWater Backup Endorsement
P
Percentage Deductible
A deductible expressed as a percentage of Coverage A rather than a flat dollar amount. Texas wind/hail and hurricane deductibles are typically percentage deductibles, commonly 1, 2, or 5 percent of Coverage A. The dollar amount of the deductible scales with the home's insured value, which can produce significant out-of-pocket exposure on higher-value Houston homes.
Why It MattersA Houston household with a 1 percent wind/hail deductible on a 500,000-dollar Coverage A faces 5,000 dollars out of pocket on every hail claim. On a 1,000,000-dollar home, the same percentage deductible is 10,000 dollars. TDI consumer materials encourage households to calculate the dollar deductible at the time of renewal, not just the percentage on the dec page. The math matters.
Charles in Plain English1 percent of Coverage A on a 500K home is 5,000 dollars. Read the percentage before you read the premium.
SourceTexas Department of Insurance, Percentage Deductibles
RelatedWind/Hail DeductibleHurricane DeductibleCoverage A (Dwelling)
Premium
The amount paid to the home carrier for coverage during the policy term. Texas home premium is calculated from rating factors including the dwelling value, location (zip code, county), construction type, roof age and material, claim history, credit-based insurance score, discount stack, and the chosen coverages and deductibles.
Why It MattersHouston households should evaluate the net premium against the contract details. A lowest-premium quote frequently reflects thinner coverage, higher deductibles, more exclusions, or temporary new-customer discounts that reprice at renewal. TDI consumer materials recommend households compare the dec page coverage between carriers, not just the bottom-line premium.
Charles in Plain EnglishTexas home premium reflects roof, location, claim history. Each input has a number.
SourceTexas Department of Insurance, Home Rating Factors
RelatedUnderwritingInsurance ScoreClaim-Free Discount
Proof of Loss
A sworn statement filed by the policyholder documenting the loss, the cause, the date, and the claimed amount. Texas home policies typically require a Proof of Loss within 91 days of the loss, though some carriers waive or extend the requirement. The Proof of Loss is the formal claim document and becomes the basis for any subsequent appraisal or litigation.
Why It MattersA Houston household filing a significant home claim should complete the Proof of Loss carefully, with documentation supporting every claimed amount. TDI consumer materials encourage households to consult with a Texas-licensed public adjuster on significant claims before filing the Proof of Loss. Errors or omissions on the Proof of Loss can complicate subsequent claim negotiation.
Charles in Plain EnglishProof of Loss is the sworn statement. Texas requires it within specific days.
SourceTexas Department of Insurance, Proof of Loss Requirements
RelatedClaimAdjusterPublic Adjuster
Public Adjuster
A Texas-licensed insurance professional who represents the policyholder (not the carrier) in negotiating a home claim settlement. Public adjusters are typically compensated on a percentage of the settlement (Texas caps the percentage at 10 percent for catastrophic-event claims). Public adjusters can be valuable on significant or contested home claims.
Why It MattersHouston households with significant home claims after Harvey, Ike, Allison, or Beryl have benefited from public adjuster representation on the carrier's settlement offer. The Texas Department of Insurance maintains a roster of Texas-licensed public adjusters and the fee disclosure rules. Public adjusters are not appropriate for every claim. Small claims do not justify the fee. Large or contested claims often do.
Charles in Plain EnglishTexas licenses public adjusters. Different from the carrier's adjuster.
SourceTexas Department of Insurance, Public Adjuster Information
RelatedAdjusterProof of LossClaim
R
Recoverable Depreciation
The portion of a home claim payment that the carrier withholds initially (paying ACV first) and then releases after the policyholder documents that repairs have been completed. Recoverable depreciation is the difference between RCV and ACV. The policyholder must complete the repair, submit receipts, and request the recoverable depreciation release.
Why It MattersA Houston household with a 30,000-dollar covered loss settled at 20,000 ACV initially has 10,000 dollars in recoverable depreciation. The household completes the repair, submits documentation, and the carrier releases the 10,000 dollars. TDI consumer materials encourage households to track recoverable depreciation and submit completion documentation within any contractual time limit (often 180 to 365 days).
Charles in Plain EnglishACV pays first. Recoverable depreciation pays second, once repairs are complete.
SourceTexas Department of Insurance, Home Claim Settlement
RelatedActual Cash Value (ACV)Replacement Cost Value (RCV)Depreciation
Renewal
The continuation of a home policy for another term, typically 12 months. The carrier issues a renewal notice with the new premium, any rate changes, any coverage changes, and the renewal effective date. Renewal is the only structured moment in the policy lifecycle when both the carrier and the policyholder formally re-engage with the contract.
Why It MattersMost Houston households renew on autopay through escrow without reading the renewal notice. TDI consumer materials recommend a contract-to-contract renewal review every year. Renewal-time rate changes, coverage changes, deductible changes, and endorsement changes typically appear on the renewal declarations page but are easy to miss without an active review.
Charles in Plain EnglishEvery Texas home renewal is a new contract. Read it like the first one.
SourceTexas Department of Insurance, Renewal Process
RelatedDeclarations Page (Dec Page)Non-RenewalPremium
Replacement Cost Value (RCV)
The settlement basis where the carrier pays the cost to replace the damaged property with new property of like kind and quality, without deduction for depreciation. RCV is the default settlement basis for the dwelling on most Texas home policies. RCV on personal property is typically available by endorsement on HO-3 and included by default on HO-5.
Why It MattersA Houston household with RCV settlement on the dwelling receives full replacement value, subject to the policy limits and any roof payment schedule endorsement. RCV is significantly better than ACV for older homes, older roofs, and older personal property. TDI consumer materials recommend RCV settlement on both dwelling and personal property where available.
Charles in Plain EnglishRCV pays to replace, not to depreciate. That is the standard most policies use.
SourceTexas Department of Insurance, RCV Settlement
RelatedActual Cash Value (ACV)Recoverable DepreciationExtended Replacement Cost
Roof Payment Schedule
An endorsement that schedules depreciation on the roof by year of roof age, with the carrier paying a percentage of the replacement cost rather than full RCV. Texas legislation in 2023 specifically authorized roof payment schedules. Common schedules pay 100 percent RCV in years 1 to 5, declining to 50 percent or less for roofs 15 years and older.
Why It MattersA Houston household with a 15-year-old composition shingle roof under a roof payment schedule endorsement may receive 50 percent of replacement cost rather than full RCV after a hail event. The Texas Department of Insurance has tracked the rapid expansion of roof payment schedule endorsements across Texas carriers since 2023. The endorsement is now common on Texas home policies and should be read carefully before signing or renewing.
Charles in Plain EnglishTexas now allows scheduled roof depreciation. Read the schedule before you sign.
SourceTexas Department of Insurance, Roof Payment Schedule Guidance
RelatedRoof Surfacing EndorsementWind/Hail DeductibleCosmetic Damage Exclusion
Roof Surfacing Endorsement
An endorsement that modifies how the roof surface specifically settles in the event of damage. Roof surfacing endorsements can include ACV settlement on roof, cosmetic damage exclusion, matching limitations, and scheduled depreciation. Texas home policy roof surfacing endorsements have evolved rapidly since 2020 in response to hail claim frequency in the Texas market.
Why It MattersHouston households should specifically read the roof surfacing endorsement at every renewal because the language is changing across Texas carriers. A roof endorsement that was favorable in 2020 may have been replaced with a less-favorable endorsement at the most recent renewal. TDI market and complaint materials track roof endorsement changes across Texas-active carriers.
Charles in Plain EnglishRoof surfacing endorsement changes how roofs settle. Read the language.
SourceTexas Department of Insurance, Roof Endorsements
RelatedRoof Payment ScheduleCosmetic Damage ExclusionMatching of Materials
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Scheduled Personal Property
An endorsement that lists specific high-value personal property items (jewelry, art, collectibles, instruments, firearms, watches) with appraised values and provides broader coverage than the Coverage C sublimit allows. Scheduled items typically settle at the scheduled value without deductible application, and coverage includes broader perils (including mysterious disappearance) than the base policy.
Why It MattersA Houston household with a 30,000-dollar engagement ring under the default Coverage C jewelry sublimit (typically 1,500 to 2,500 dollars) has 27,500 to 28,500 dollars of uninsured exposure. Scheduling the ring removes the sublimit gap and adds broader perils. TDI consumer materials encourage households to schedule high-value items. Specialty carriers including Chubb and Cincinnati write broad scheduled property forms.
Charles in Plain EnglishJewelry, art, instruments, collectibles. Sublimits cap them. Scheduling protects them.
SourceTexas Department of Insurance, Scheduled Personal Property
RelatedCoverage C (Personal Property)SublimitEndorsement
Service Line Coverage
An endorsement that pays for damage to underground service lines connecting the home to the street (water, sewer, gas, electric, internet, cable) and the excavation cost to repair them. Service line damage from tree roots, ground shifting, freeze events, or aging pipe material is not covered under the base home policy because the lines are owned by the homeowner but located underground.
Why It MattersA Houston household with a broken underground sewer line can face 5,000 to 15,000 dollars in excavation and replacement cost. TDI consumer materials encourage households to evaluate service line endorsement at limits of 10,000 to 25,000 dollars. The endorsement is typically inexpensive (20 to 60 dollars annually) and is a high-frequency, low-severity coverage that pays out often.
Charles in Plain EnglishThe line from the street to the house. Service line coverage pays for the dig.
SourceTexas Department of Insurance, Service Line Endorsement
RelatedEquipment Breakdown CoverageEndorsementFoundation Coverage
Slab Leak
A water leak in the plumbing lines running through or under the concrete slab foundation. Houston-area slab leaks are common because of clay-soil movement, pipe age, and corrosion of copper or galvanized lines. Most Texas home policies cover the water damage from a slab leak but exclude the cost of accessing the leak (slab removal, dig, repair) or repairing the slab itself.
Why It MattersA Houston household with a slab leak frequently faces a 8,000 to 25,000-dollar repair cost where only the water damage portion is covered, not the slab access or repair. TDI consumer materials reference slab leaks as a common Houston-area coverage dispute. Some carriers offer slab leak access coverage endorsements. TDI consumer materials recommend households read the dwelling perils list carefully.
Charles in Plain EnglishHouston clay soil moves slabs. Most policies cover the water damage. Few cover the slab.
SourceTexas Department of Insurance, Slab Leak Coverage
RelatedFoundation CoverageService Line CoverageEndorsement
Sublimit
A coverage cap within a broader coverage category. Coverage C (Personal Property) typically has sublimits on specific categories including jewelry (1,500 to 2,500 dollars), firearms (2,500 dollars), business property (2,500 dollars), money and cash (200 to 500 dollars), and collectibles (1,500 to 2,500 dollars). Sublimits apply per category, not per item.
Why It MattersA Houston household with 50,000 dollars in unscheduled jewelry has 1,500 to 2,500 dollars in actual coverage under the Coverage C jewelry sublimit, regardless of the total Coverage C limit. TDI consumer materials encourage households to read all Coverage C sublimits and to schedule items that exceed sublimits. Sublimits are the most-missed Texas home coverage gap.
Charles in Plain EnglishCoverage C has the limit. Sublimits cap specific categories inside it.
SourceTexas Department of Insurance, Coverage Sublimits
RelatedCoverage C (Personal Property)Scheduled Personal PropertyMold Sublimit
Subrogation
The home carrier's right to pursue recovery from an at-fault third party after paying a covered claim. If the carrier paid a 30,000-dollar water damage claim caused by a contractor's negligence, the carrier can sue the contractor to recover what it paid. Successful subrogation can return the policyholder's deductible.
Why It MattersHome subrogation operates in the background of most claims and typically does not require policyholder action beyond cooperation. TDI regulates carrier subrogation practices. Some subrogation recoveries return the deductible. Most do not directly benefit the policyholder but are essential to the carrier's claim economics and to overall premium discipline.
Charles in Plain EnglishCarriers pursue at-fault third parties after they pay. Texas regulates how.
SourceTexas Department of Insurance, Subrogation Practices
RelatedClaimDeductibleAdjuster
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Texas Department of Insurance (TDI)
The Texas state agency that regulates insurance carriers, licenses agents and brokers, enforces the Texas Insurance Code, investigates consumer complaints, publishes consumer guides, and approves policy forms for use in Texas. TDI is the primary state-level authority for all Texas home insurance matters.
Why It MattersHouston households with home carrier disputes, coverage interpretation questions, or complaint resolution needs can file directly with TDI without going through the carrier first. The Texas Department of Insurance maintains a complaint database, a market-conduct examination program, and a consumer assistance team. TDI does not write policies. TDI regulates the entities that do.
Charles in Plain EnglishTDI publishes consumer guides, takes complaints, regulates the carriers. They do not sell you the policy.
SourceTexas Department of Insurance
RelatedCancellationNon-RenewalTexas FAIR Plan
Texas FAIR Plan
The Texas FAIR Plan Association is the state-run residual market home insurer for Texas properties that cannot obtain coverage in the standard or surplus-lines market. FAIR Plan provides basic dwelling and contents coverage with restrictive eligibility, higher premiums, and limited coverage options. The FAIR Plan is the home insurance market of last resort in Texas.
Why It MattersHouston households that have been non-renewed multiple times, that own homes with significant unaddressed underwriting issues, or that fall outside standard market appetite may end up in the Texas FAIR Plan. TDI consumer materials encourage households to exhaust standard and surplus-lines options before turning to FAIR Plan. FAIR Plan premium is typically higher than standard market for comparable coverage.
Charles in Plain EnglishFAIR Plan is the market of last resort. Texas writes when nobody else will.
SourceTexas FAIR Plan Association
RelatedNon-RenewalUnderwritingTexas Windstorm Insurance Association (TWIA)
Texas Inspection Form
A standardized home inspection report used by Texas carriers to evaluate property condition. The Texas 4-Point Inspection covers roof, plumbing, electrical, and HVAC systems. The Wind Mitigation Inspection separately documents roof attachment, opening protection, and other wind-resistance features that affect TWIA and wind/hail rating.
Why It MattersA Houston household renewing or placing new home coverage may be required to complete a Texas inspection. The 4-Point Inspection identifies aged plumbing (galvanized, polybutylene), older electrical panels (Federal Pacific, Zinsco, Stab-Lok), HVAC condition, and roof age and material. Carriers use the inspection to underwrite, price, or decline coverage. TDI consumer materials encourage households to address inspection findings promptly.
Charles in Plain EnglishThe 4-point inspection is the carrier's underwriting check. Roof, plumbing, electrical, HVAC.
SourceTexas Department of Insurance, Home Inspection Standards
RelatedInspectionUnderwritingRoof Surfacing Endorsement
Texas Windstorm Insurance Association (TWIA)
The Texas state-administered wind insurance pool that provides wind and hail coverage for properties in the 14 designated coastal counties (and parts of Harris County) where standard carriers typically exclude wind. TWIA serves as the wind insurer of last resort for the Texas coast. TWIA coverage is limited and supplements (rather than replaces) a standard home policy.
Why It MattersHouston households in TWIA-eligible coastal areas typically need both a standard home policy (excluding wind) and TWIA coverage for wind and hail. The Texas Department of Insurance and TWIA both publish eligibility maps and rate information. Hurricane Beryl in 2024 produced significant TWIA claim activity along the Texas coast. TWIA coverage limits and deductible structure differ from standard market home coverage.
Charles in Plain EnglishTWIA is wind insurance for the Texas coast. Standard carriers exclude wind in the named coastal counties.
SourceTexas Windstorm Insurance Association
RelatedHurricane DeductibleNamed Storm DeductibleTexas FAIR Plan
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Water Backup Endorsement
An endorsement that pays for damage caused by water backing up through sewers, drains, or sump pump failures into the dwelling. Sewer and drain backup is excluded under the base Texas home policy. Water Backup endorsement restores coverage subject to a stated limit (typically 5,000 to 25,000 dollars) and a separate deductible.
Why It MattersA Houston household experiencing a sewer backup during a heavy rain event without Water Backup endorsement has no home policy coverage for the resulting damage. TDI consumer materials recommend Water Backup endorsement at limits of 10,000 to 25,000 dollars given Houston's drainage and heavy-rain exposure. The endorsement is typically inexpensive (40 to 100 dollars annually) and is high-frequency in the Houston market.
Charles in Plain EnglishSewer backs up. Water backup endorsement pays. The base policy does not.
SourceTexas Department of Insurance, Water Backup Endorsement
RelatedEndorsementMold SublimitCoverage A (Dwelling)
Wind/Hail Deductible
The deductible that applies to any loss caused by wind or hail under a Texas home policy. The Wind/Hail deductible is typically expressed as a percentage of Coverage A (1, 2, or 5 percent), separate from the All Other Perils deductible. On Houston-area homes, Wind/Hail is the dominant deductible because hail and wind claims are the most frequent loss types.
Why It MattersA Houston household with a 1 percent Wind/Hail deductible on a 500,000-dollar Coverage A faces 5,000 dollars out of pocket on every hail claim. The Cypress 77433 corridor, parts of Spring, Klein, and the Katy I-10 corridor regularly produce hail events large enough to declare roofs total. TDI consumer materials encourage households to read the Wind/Hail deductible at every renewal because the percentage may change.
Charles in Plain EnglishWind/Hail is the dominant Houston deductible. 1 to 2 percent of Coverage A, separate from AOP.
SourceTexas Department of Insurance, Wind and Hail Deductibles
RelatedAll Other Perils DeductibleHurricane DeductiblePercentage Deductible
