Homeowners Insurance: A Guide for Texas Consumers

(Revised June 2002)
Related Links:

• Homeowners Insurance Rate Guide
• Discounts for Hail-Resistant Roofs

Table of Contents

• Homeowners Insurance
• Other Types of Insurance You Might Need
• Shopping for Homeowners Insurance
• Having Trouble Insuring Your Home?
• Losing Your Insurance
• Your Rights Against Unfair Discrimination
• If You Have a Claim
• Commonly Asked Questions
• For More Information

Homeowners Insurance

Homeowners insurance protects you from losses caused by storms, fire, theft, and other events outlined in your policy. It is important to know what's in your policy. This publication gives you general information about homeowners insurance, but it is not a substitute for the policy itself. Make sure you read your policy carefully and understand your specific coverages. It's also important to know your rights. Texas has a Consumer Bill of Rights for homeowners and renters insurance. Your company must send the Bill of Rights with your policy or renewal.
Don't wait until you have a claim to review your policy and to know your rights.

Texas Homeowners Policies

You can buy a dwelling policy that covers only the structure of your house. Or, like most Texans who own their homes, you can buy a homeowners policy, which combines five different types of coverage:

Dwelling - pays for damage to your house and any outbuildings, such as detached garages and storage sheds.

Personal property - pays when household items, including furniture, clothing and appliances, are damaged, stolen, or destroyed.

Liability - protects you against financial loss if you are found legally responsible for someone else's injury or property damage. A homeowners policy automatically provides $25,000 in coverage. You can buy up to $1 million in coverage for an extra premium.

Medical payments - pays medical bills for people hurt while on your property. It also pays for some injuries that happen away from your home, such as your dog biting someone. A basic homeowners policy pays $500 in medical bills. You can pay extra and get up to $5,000 in medical payments coverage.

Loss of use - pays living expenses if your home is too damaged to live in during repairs. The most common policy pays up to 20 percent of the amount for which your house is insured.

Types of Homeowners Insurance Coverages

Companies can sell several types of policies in Texas, each with a different level of coverage.

• HO-A policies provide extremely limited actual cash value coverage of your home and its contents. Only the types of damage specifically listed in the policy are covered.
• HO-A amended policies provide more extensive coverage than the base HO-A policy but less coverage than an HO-B.
• HO-B policies provide replacement cost coverage for most types of damage, except those specifically excluded in the policy.
• HO-C policies provide the most extensive coverage, but are more expensive than other types of policies.
• National policies are policies of national insurance organizations or large national companies that the Commissioner of Insurance has approved for sale in Texas. Coverage provided by these policies may differ considerably from one another and from the coverage provided in standard Texas homeowners policies.
  Generally, HO-B policies provide the most coverage for the price, but some companies may not offer the HO-B policy.

What Homeowners Policies Do and Don't Cover

Companies may exclude coverage for certain losses. For example, if you live on the Gulf Coast, you might receive an endorsement that excludes coverage for wind and hail damage. In some areas with a history of hail storms, some companies provide only actual cash value coverage for roofs instead of full replacement cost. Actual cash value pays for damage minus depreciation on the roof, depending on its age and condition.

Most policies will not cover mold remediation beyond that necessary to repair or replace property damaged by a water loss otherwise covered by the policy. The HO-A policy offers no coverage for mold remediation or for damage caused by sudden and accidental water leaks, although some companies may offer that coverage as an endorsement to the base HO-A policy. If you have an HO-B policy, you will be able to buy additional coverage in increments of 25 percent, 50 percent, and 100 percent of your policy's limits to cover mold remediation. If you have questions or concerns about how a mold claim is being handled, or you need information about how to minimize mold losses, ask your insurance company for a set of guidelines regarding mold claims. If your company cannot provide you with a set of guidelines, review TDI's publication, Effectively Handling Water-Damage and Mold Claims. The publication includes recommended guidelines for companies and homeowners to ensure timely and efficient handling of mold claims. These guidelines are only recommended, however. Your company may have different guidelines and procedures.

Note: If you have an HO-B policy that was bought or renewed before January 1, 2002, your policy may cover mold remediation up to your policy limits without an added endorsement. Ask your agent or company whether your policy covers mold remediation.

Other Policies

In addition to the Texas homeowners policy, there are other types of policies to protect you from losses to your residence.

• Renters: A landlord's insurance does not cover a renter's personal property. Renters insurance covers your belongings, provides liability protection, and pays extra living expenses if a fire or other disaster forces you to move temporarily from your rented home.
• Condominiums: Condominium insurance matches the benefits of renters insurance, and also covers damage to improvements, additions, and alterations to the condominium unit.
• Townhouses: Townhouses may be insured by either an individual homeowners policy or an association master policy. If a townhouse is owner-occupied and the townhouse association does not have a master policy on the building, you can purchase a homeowners policy on your individual unit. If the association has a master policy, you should get a Texas tenant homeowners policy to insure your personal property.
• Mobile homes: Mobile homes without wheels and resting on blocks or a permanent foundation qualify for a homeowners policy. However, most mobile homes are insured by a mobile owners policy. A mobile owners policy is an auto policy that covers mobile homes used as residences. Mobile owners policies offer extremely limited coverage.
• Farm and ranch owners: Farm and ranch owners policies insure homes outside city limits on land used for farming and raising livestock. You can pay extra and get coverage for certain farm equipment and outbuildings.

Maintain Adequate Coverage

Buy enough coverage to avoid a major financial loss if you have a fire or other loss. This means keeping a realistic dollar amount of coverage on your house.

Replacement Cost Coverage of Your House

Texas standard HO-B and HO-C policies provide replacement cost coverage for your house, up to your policy's dollar limits. Replacement cost is what you would pay to rebuild or repair your home, based on current construction costs. Replacement cost is different from market value. It does not include the value of your land. If you are not sure of the amount it would cost to rebuild your home, your company or agent usually has construction cost tables to help you figure the cost.

To receive full payment (minus your deductible) for a partial loss, such as a hail-damaged roof, you must insure your house for at least 80 percent of its replacement cost. If you insure your house for less than 80 percent of the full replacement cost, the insurance company will pay only part of the expense of a partial loss.

Unless you buy an endorsement increasing your coverage, HO-A policies only provide actual cash value coverage. Actual cash value is the replacement cost of your property minus depreciation.

Your Policy's Dollar Limits are Important

If you insure your house for $100,000, that's the most you will get if it is destroyed, even if it would cost more to replace it. The Declarations Page on the front of your policy shows how much coverage you have. Talk with your agent or company representative if you have any questions about your insurance limits. If a fire destroys your home, Texas law requires the insurance company to pay the full amount of the policy - even if this amount is more than the replacement cost.

Don't wait until you have a claim to learn your policy's limit.

Replacement Cost Coverage for Your Personal Property

Homeowners policies automatically cover household contents - furniture, clothes, appliances, etc. - up to 40 percent of the amount your house is insured for. This means if you insure your house for $100,000, its contents are insured for up to $40,000. You can get more coverage by paying a higher premium. This automatic coverage pays only the actual cash value of damaged, stolen, or destroyed household goods. Actual cash value is an items replacement cost, minus depreciation.

You may be able to pay extra and buy replacement cost coverage that ignores depreciation and pays for a new item like the one you lost.

Replacement cost coverage gives you more protection than actual cash value coverage. The following example illustrates why: A burglar steals your six-year-old television set. With actual cash value coverage, you get only what you would expect to pay for a six-year-old television set. With replacement cost coverage, the insurance company pays to replace your TV with a new set similar to the stolen one.

Companies generally want proof you replaced an item before paying your claim in full. However, if you have an HO-B policy, the company must advance you the first $1,500, plus the depreciated value of any other damaged property, without requiring proof of replacement. After that, the company must pay you within five business days after receiving proof you replaced, restored, or repaired the property. A company can offer to replace the items instead of paying cash, but the choice is yours.

Inventory Your Property

Many people learn after a fire or storm that they didn't have enough personal property coverage. Making an inventory will help you decide how much insurance you need. It also will simplify claims.

Your inventory should list each item, its value, and serial number. Photograph or videotape each room, including closets, open drawers, storage buildings, and your garage. Keep receipts for major items in a fireproof place.

Homeowners insurance on certain items like jewelry and furs is limited. You may be able to buy more coverage for an extra premium.

Other Types of Insurance You Might Need

Flood Insurance

Texas ranks at or near the top of the nation in weather-related property damage each year. A large portion of this damage is due to flooding.

Homeowners policies do not cover flood damage. However, the National Flood Insurance Program (NFIP) offers flood coverage in many areas. Local insurance agents sell NFIP flood policies and can tell you about the program in your area.

For more information, call NFIP at 1-800-427-4661

If a lender determines that a property is in a special flood hazard area, the borrower is required to purchase flood insurance. A special flood hazard area has a 1 percent chance of being inundated by flood.

Hurricanes and Windstorm Insurance

The Texas Windstorm Insurance Association (TWIA) is the state's insurer of last resort for wind and hail coverage in the 14 coastal counties and parts of Harris County on Galveston Bay. TWIA provides wind and hail coverage when insurance companies exclude it from homeowners and other property policies sold to coastal residents. You can buy TWIA coverage through local insurance agents if you need it.

When a hurricane enters the Gulf of Mexico (80 degrees longitude and 20 degrees latitude), you can no longer change or purchase new Windstorm coverage.

If you plan to build, add to, or renovate a home or other structure and want TWIA coverage, you or your builder should request an inspection by a TDI windstorm inspector or a Texas licensed professional engineer appointed by TDI. Your agent can tell you how to get an inspection.

Earthquake Insurance

If you are concerned about earthquakes, you can get coverage with a separate policy. The cost is relatively low because earthquakes are rare in Texas.

Extra Coverage (Endorsements)

You might want more coverage for certain items than your policy provides. For an extra premium, you may be able to buy endorsements that expand or increase the coverage on these items. Some of the most common endorsements expand or increase coverage for jewelry, fine arts, camera equipment, coin or stamp collections, computer equipment, and radio and television satellite dishes and antennas.

Personal Umbrella Liability Insurance

If you want more liability coverage than a homeowners policy provides, you can buy a separate umbrella policy. Because policies vary, make sure the agent or company fully explains the coverage.

Shopping for Homeowners Insurance

Most homeowners policies are sold by companies that set their own rates, and their rates are not regulated by the state. Rate-regulated companies, however, base their rates according to a benchmark established each year by the Commissioner of Insurance. These companies can raise or lower their rates without prior approval, as long as the new rate is within 30 percent above or below the benchmark. If your insurance company is not rate-regulated, there is no limit to the premium increase that can be charged at renewal.

A company can change your individual premium only at your policy renewal time.

Before you buy a policy, shop around. Rates vary widely from company to company, and coverages vary by policy. Call several companies to get quotes. TDI publishes a homeowners rate guide that can help you shop. The rate guides list companies and their annual premiums for policies with $100,000 coverage on the house, $40,000 on its contents, and a 1 percent ($1,000) deductible. The guides also include complaint indexes, indicating companies? customer service records, and financial ratings from A.M. Best Co., an independent financial rating organization. Financial ratings indicate a company's financial strength and stability.

Discounts

Companies offer premium discounts if you take steps to reduce the chances of a loss from burglary, hail, or fire. Some discounts are mandatory, while others are optional. Find out if you're eligible for any discounts your insurance company offers.

Mandatory Discounts

The following discounts are mandatory for all homeowners insurance companies. However, the percentage of the discounts may vary for non rate-regulated companies such as Lloyd's and reciprocal exchange companies.

Home security: You can get a 5 percent premium discount if your house meets these minimum-security standards for doors and windows:

• Outside doors must be solid core doors that are 1 3/8 inches thick and secured by deadbolt locks.
• Metal doors must be secured by deadbolt locks.
• Double doors must meet the standards for outside doors. The inactive door must be secured by header and threshold bolts that go into metal strike plates. If door glass is within 40 inches of the header and threshold bolts, the bolts must be flush-mounted in the edge of the door.
• Dutch doors must have concealed flush-bolt locking devices to interlock the upper and lower halves and must be secured by deadbolt locks.
• Garage doors must be equipped with key-operated locking devices.
• Windows must have auxiliary locking devices.
• Sliding glass doors must be secured by secondary locking devices to prevent lifting and prying.

Burglar alarm: You can reduce your insurance premium by 15 percent if you have an electronic burglar alarm system that meets these requirements:

• The system must cover all doors, windows, and other exterior openings, such as skylights.
• You must have both an interior and an exterior siren.
• The system must be listed by Underwriters Laboratory and monitored by a UL-listed central station.
• Sales, service, installation, and monitoring of the system must comply with the Texas Private Investigators and Private Security Agencies Act.

Contact the crime prevention unit of your local police department or sheriff's office to get an inspection to qualify for the mandatory burglar alarm and home security discounts.

Sprinkler system: You can save 8 percent on your homeowners premium if your home has an approved fire protection sprinkler system. Sprinklers provide a 12 percent discount on the fire insurance premium of dwelling and farm and ranch policies. A licensed inspector must certify that the system meets National Fire Protection Association standards. You will receive a certificate to qualify for the discount. For information on registered fire protection sprinkler system contractors, call the Texas Commission on Fire Protection at 512-918-7100

Impact-resistant roofs: Companies may offer up to a 35 percent discount on homeowners insurance for impact resistant roofs. These roofs are made of materials that experience less damage from hail. The actual discount amount depends on where you live and the type of roof installed. Insurance companies must give discounts for all impact-resistant roofs tested by a qualified, approved laboratory. Some companies require you to give up coverage for cosmetic damage to your roof to get the discount.

Optional Discounts

Companies also may give optional discounts. Check with your company to see if you qualify for any of the following discounts. The amounts listed are maximum discounts:

• Age of house (companies set own standards) = 15 percent
• Noncombustible roof = 2 percent
• Premises in good condition (companies set own standards) = 2 percent
• Good claims experience for three consecutive years = 5 percent
• Other policies with same company or group = 5 percent
• House insured to full replacement cost = 5 percent
• Senior citizens discount = 5 percent
• Burglar, fire, and smoke alarm systems that do not qualify for the mandatory electronic -- security discount may qualify for an optional discount:
  • Central station = 12 percent
  • Remote alarm = 10 percent
  • Local alarm = 2 percent
  • Combination fire, smoke, and burglar alarm system = 15 percent
• Automatic sprinkler systems that do not qualify for the mandatory discount = 8 percent
• Fire extinguishers = 2 percent
• Home security devices = 5 percent
• Stovetop fire suppression devices = 1.5 to 6 percent

Having Trouble Insuring Your Home?

Sometimes, finding adequate and affordable insurance can be difficult. If you are having difficulty finding a homeowners policy, you should:

• Remove Potential Risks
  You can make your home more insurable by changing things that insurance companies and agents interpret as signs of potential risk. Look around your home for problems that could cause damage or injury, such as a heavy tree limb hanging over your roof, loose porch railings, or cracks in your walkways.
• Watch Out for Crime
  Since theft is a common cause of homeowners claims, some insurers may not be willing to insure homes that seem vulnerable to crime. While you cannot stamp out crime by yourself, you can take a few steps to make yourself less vulnerable. These precautions could also lower your insurance premiums.
  • Call the crime prevention officers of your local police force. They can inspect your home and give you specific advice on protecting it.
  • Install dead bolts or other security devices on doors and windows.
  • Work with your neighbors to start a Neighborhood Watch Program. Your local police department has helpful information.
  • Install a burglar alarm that alerts the police or a security company.
  • Keep trees and shrubs trimmed, especially around windows and entryways. Overgrown shrubbery can provide hiding places for would-be burglars. Avoid parking cars on the street. Cars parked on the street are tempting targets for thieves and vandals and, like overgrown shrubs, can provide handy hiding places.
  • Keep the area around your home well-lit.
• Maintain Your House and Yard
  Your home's appearance is important when you're looking for insurance. Since companies want to avoid losses from injuries or accidents, agents look for signs of poor maintenance. Agents might assume that a cluttered yard and faded paint suggest an unsafe home. The outside of your home will be inspected when you apply for insurance, often when you are not at home. Insurance companies have the right to cancel a policy within the first 90 days for any reason, and some may reject new customers because an inspection revealed a home in need of repair.
  • Fix any obvious signs of damage, such as rotting boards, sagging screens, or a loose front door.
  • Remove anything from your property that could easily cause an accident.
  • If your roof leaks, you should fix or replace it. Water stains on a ceiling tell an agent inspecting the inside of your home that you might have a future claim for water-damaged property.
  • Keep your yard clean and trim.
  • If your paint is peeling or faded, consider repainting.

Losing Your Insurance

Knowing your rights can help you overcome setbacks when you are rejected for homeowners insurance or lose your coverage. If you request it, a company must explain in writing its reason for declining, canceling, or not renewing your policy. If a company denies you because of your credit history, it must tell you why. You may file a complaint with TDI if you believe the company improperly denied you insurance.

CLUE®

Many companies use the Comprehensive Loss Underwriting Exchange (CLUE) to review an applicant's claims history. CLUE lists the property insurance claims history of houses-regardless of ownership-and individuals for the preceding three years.

Federal law gives you the right to challenge wrong information. If an insurance company based part of its decision to deny you coverage on a CLUE report, you can get a free copy of the report by calling the Equifax Insurance Consumer Center at 1-800-456-6004

Before calling, get the CLUE reference number from the company's denial letter or from the company. Using the reference number will speed the process by making sure you are requesting the right report.

CLUE is a registered trademark of Equifax Inc.

Cancellation and Non-renewal

Cancellation means either you or the insurance company stops coverage before your policy's normal expiration date. When a policy is canceled, the company must refund your premium, minus the portion paid for coverage actually received.

Non-renewal means a company refuses to renew your policy when it expires. A company must give you written notice at least 30 days before your policy's expiration date. If the company does not notify you in writing in the required time, it must renew the policy at your request.

Note: A company cannot non-renew or raise your premium because of a claim you filed that was not paid or was not payable under your policy.

Cancellation & Non-renewal Summary for Homeowners, Renters, Condominium, Dwelling, and Farm and Ranch Owners Policies
 

*Exceptions:

• If the company fails to notify you after a second non-weather claim, it cannot refuse to renew your policy because of a third claim.
• Instead of non-renewal, the company can charge an added premium called a surcharge.
• A company can add a surcharge for filing two or more non-weather claims the previous policy year.

Your Rights Against Unfair Discrimination

An insurance company cannot deny, refuse to renew, limit, or charge more for coverage because of your race, color, religion, or national origin.

A company also cannot deny, refuse to renew, limit, or charge more for coverage because of your age, gender, marital status, geographic location, disability or partial disability - unless the refusal, limitation, or higher rate is "based on sound underwriting or actuarial principles." Sound underwriting or actuarial principles means the company would have to show valid statistical evidence that your home presents a greater risk for a loss than other homes it is willing to insure.

A company cannot unfairly discriminate between individuals of the same rate class and with essentially the same risk in its rates, policy terms, and benefits, or in any other manner unless the refusal, limitation, or higher rate is "based on sound actuarial principles."

In addition, a company cannot refuse to insure a home based solely on its age or low value. Companies can offer discounts for newer homes and require updates to the wiring, plumbing, and heating systems before agreeing to insure an older home. If you live in an older home that has been updated, you may be placed in a higher -- priced company.

If You Have a Claim

If you have a claim, the company must start investigating your claim within 15 days after receiving written notice. However, the company may ask you for more information. Once you send the information, the company has 15 business days to accept or reject your claim. If the company agrees to pay, it must do so within five business days. If the company rejects your claim, it must say why in writing.

Exceptions:

• A company that needs more time can take 45 days to make a decision if it sends you a notice explaining the delay.
• A company that suspects arson has 30 days after receiving the required paperwork to either accept or reject a claim.
• TDI can give companies an extra 15 days after a major natural disaster.
• Surplus lines carriers have 20 days to pay your claim after agreeing to do so.

A company that takes too long to pay is liable for your reasonable attorney fees plus damages equal to 18 percent of your claim if you sue and win. In an insurance claim lawsuit, the insurance company has the burden of proving it was not obligated to pay. If you are financing your home, your insurance company may require your lender to sign or approve your claim check. When this happens, the lender must act within 14 business days after receiving the request. Failure to act within this time period could result in a $500 civil penalty. Complaints about lenders failing to process claim payments should be directed to the Texas Attorney General's Office at 1-800-252-8011

Claim Tips

To make the claim process run smoothly and to protect your rights, follow these steps:

1. Know your coverage. Your policy's dollar limits and benefits appear on your policy's Declarations page. If you need help, ask your agent or company representative.
2. If you have a loss, notify your agent or insurance company immediately. Report losses involving theft or crime to the police.
3. Make a list of your damaged property. If possible, photograph or videotape the damage before making any repairs.
4. Make only temporary repairs to protect your house and belongings. The insurance company may deny your claim if you make permanent repairs before it inspects the damage. If you are not sure whether a repair is considered permanent, contact the insurance company before beginning repairs. The cost of these repairs and for storing personal belongings is covered by your policy. It is important to make only temporary repairs.
5. Keep receipts. For personal property claims, you must provide evidence that you bought the replacement items. If you bought materials for temporary repairs, receipts will help you get reimbursed quickly.
6. Try to be there when the insurance company's adjuster inspects your home. You may have your own contractor or builder represent you. In times of major disasters, it might not be possible to meet with the adjuster.
7. If you have to move because of a disaster, make sure your address is visible. Leave a sign with your temporary address, phone number, and the name of your insurance company.
8. If you use a public adjuster, make sure you know the fee. Public adjusters help consumers with their homeowners claims. They generally charge a percentage of your claim settlement. In most cases, you probably don't need a public adjuster.

Proof of loss. Within 15 days after you report your loss, the company may request a signed, notarized proof-of-loss form. In most cases, the company will ask you to estimate the replacement cost of the household items you lost and the cost of repairing your home. Contractors, catalogs, and retailers are good sources of current price information.

• Include sales tax in your cost estimates.
• Ask whether you should use exact costs, or if you can round numbers to the nearest dollar.
• Don't forget to include small items such as kitchen utensils or clothing accessories.

The company will use the form to decide the value of your claim, so make your list as complete and as detailed as possible. Include photos and receipts. Be sure to keep copies for your records.

Final estimate. The adjuster will prepare an estimate of the cost to repair or replace your home and any personal belongings. The insurance company's offer is based on this estimate.

Disputes. If you disagree with the adjuster's estimate, tell the company why. The company may have overlooked something and may make adjustments. If you still disagree, you can use a process called appraisal.

The appraisal process governs only disputes over the amount to be paid. It is not for settling disputes about coverage or the cause of a loss.

You and the company each hire an appraiser. The two appraisers then choose a third one as umpire. Your appraiser and the company's appraiser make their own estimates of your loss. If they differ, the umpire makes the final decision, which is binding on both you and the company. You are responsible for the expenses of your appraiser and for half of the umpire's expenses.

Payment. Once the company agrees to pay all or part of your claim, it must do so within five business days. If you don't get your check within five days, contact your agent or company. If you believe that the company is delaying payment intentionally, contact TDI for help.

Note: Most companies pay homeowners claims with two checks. The first, issued after the adjuster reviews your loss, is for the estimated cost of repairs, minus depreciation and your deductible. The company issues the second check for the balance of your claim after receiving the contractor's bill for the finished job, as long as the repairs or replacements are completed within 365 days of the date of loss. You may submit a written request for an additional 180 days extension.

Getting Help from TDI

Companies are subject to penalties if they fail to settle claims promptly and fairly.

If you believe an insurance company has treated you unfairly, you should file a complaint with the Texas Department of Insurance.

Before you contact TDI, contact your company. Most companies operating in Texas are required to have a toll-free telephone line to provide customer assistance. The number should be listed in your policy.

Commonly Asked Questions

Q: What if Licensed Companies Won't Insure My Home?
A: If you can't find a licensed company willing to cover your home, contact TDI for information regarding the state's Market Assistance Program (MAP). MAP links homeowners in designated "underserved" areas who have been unable to find insurance for their homes with participating insurance companies.

If you're unable to find insurance through the MAP program, your last resort might be to obtain insurance from a surplus lines carrier. Surplus lines carriers are out-of-state companies not licensed in Texas, but legally eligible to sell insurance on a surplus lines basis. Surplus lines carriers generally charge more than licensed companies and often offer less coverage. Surplus lines carriers are not members of a guaranty association. This means that your claims might go unpaid if the surplus lines carrier becomes unable to pay its claims.

Before you buy from a surplus lines carrier, make sure there are no other options. Agents must make a "diligent effort" to find coverage with a licensed company before offering you a surplus lines carrier. Ask which licensed companies turned you down, and why. Companies must justify rejections.

Q: My insurance company refused to renew my homeowners policy because I filed a claim. Can it do that?
A: It depends on the type and number of claims you have filed. A company cannot refuse to renew your policy because of weather-related claims. It can decline to renew a policy, however, if you have three or more non-weather related claims in a three-year period.

Q: My homeowners policy is coming up for renewal but the company says it will drop me if I don't replace my leaky roof. Is this legal?
A: Yes. An insurance company may refuse to renew a policy because of a home's condition. This can include a worn -- out roof. The company must give you at least 30 days' written notice before not renewing your policy, but some companies give you six months to a year to make repairs. If your roof needs replacement because of a storm or other covered loss, the company must pay for the work (minus your deductible). If the roof is just worn out, you are responsible for paying to replace it.

Q: I recently moved out of my home. Can the company cancel my homeowners policy? Do I currently have coverage on my home?
A: The company may not cancel your policy because your house is vacant. However, the policy itself automatically suspends coverage for damage to your house if the house is vacant for 60 days or longer. The policy's liability coverages will continue. However, the vacancy could cause the company to refuse to renew the policy when it expires.

Q: I shopped carefully before picking a new homeowners insurance company. Two months later, I received a cancellation notice. Can the company do this?
A: Yes. A company will evaluate an application to determine if it qualifies under its guidelines for new business. During the first 90 days after a policy takes effect, the company may cancel it for almost any reason, provided the consumer receives 30 days' written notice. If the company cancels the policy, it must refund your premium, minus the portion paid for coverage actually received.

For More Information

• TDI offers a variety of insurance-related publications and services. Publications are available in alternate languages and formats and on our Web site.
• For printed copies of free consumer publications, call the 24-hour Publications Order Line
  1-800-599-SHOP (7467)
  305-7211 in Austin
• For answers to general insurance questions call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday
  1-800-252-3439
  463-6515 in Austin
• You may file an insurance-related complaint with TDI several ways:
  • by our Web site at www.tdi.state.tx.us/consumer/complfrm.html
  • by e-mail at ConsumerProtection@tdi.state.tx.us
  • by fax at 512-475-1771
  • by mail at
    Texas Department of Insurance
    Consumer Protection (111-1A)
    P.O. Box 149091
    Austin, TX 78714-9091
• For recorded information on TDI jobs, call our 24-hour Job Line
  1-800-952-7099

The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our Web site. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.