What are the most critical coverages to evaluate in a Houston homeowners policy?

The Houston Homeowner’s Checklist: 5 Critical Coverages to Evaluate Before You Buy

Comparing homeowners insurance quotes in the greater Houston area can be overwhelming. You’re not just worried about hurricanes from the Gulf; you’ve seen what a hailstorm can do in Katy or what a sudden freeze can do to pipes in The Woodlands.

You’ll see one quote that’s hundreds of dollars cheaper than another, but it’s a dense document full of different terms, limits, and percentages. How do you know what you’re really paying for?

In Texas, that fine print is everything. A “cheaper” policy isn’t cheap if it leaves you with a $25,000 roof bill after a hailstorm or a massive deductible after a hurricane.

This guide is your checklist. We’ll cut through the jargon to spotlight the 5 coverage decisions you must get right. Use this to compare your quotes side-by-side and make a confident, informed choice.

 

Coverage #1: Dwelling (Coverage A): Replacement Cost vs. Actual Cash Value

This is the single most important decision on your policy. It determines the very foundation of your financial recovery after a total loss.

The Decision: Do I want a check for what my home was worth second-hand (Actual Cash Value), or a check for what it costs to rebuild it new (Replacement Cost)?

Actual Cash Value (ACV) is a depreciating number. It pays for the current, “used” value of your home’s components. Think about it, your 12-year-old roof and 20-year-old floors are not worth what they were when new. ACV pays you for that “used” value, which is nowhere near enough to buy new materials at today’s labor and supply costs.

Replacement Cost (RCV) is the standard you should demand. This coverage agrees to pay the full amount required to rebuild your home with new materials at current prices, up to your policy limit (minus your deductible). It ignores depreciation and makes you whole again.

Our Expert Advice: A policy built on ACV might save you money on the premium, but it’s a gamble you can’t afford to lose. It could leave you tens or even hundreds of thousands of dollars short. For your primary residence, you should always insist on a Replacement Cost (RCV) policy.

 

Coverage #2: The Texas Deductible “Blind Spot” (Wind & Hail)

In Texas, you almost always have two different deductibles. The one that catches most homeowners by surprise is the one for our most common threats, wind and hail.

The Decision: What is the exact dollar amount I will have to pay out-of-pocket if a hurricane or hailstorm hits my home?

1. All Other Peril (AOP) Deductible: This is a simple, flat dollar amount (e.g., $2,500). It applies to standard claims like a kitchen fire, a burst pipe from a freeze, or theft.
2. Wind & Hail Deductible: This is the big one. It’s almost always a percentage (e.g., 1%, 2%, or 3%). This deductible applies to any damage from wind (like a hurricane) or hail (like a severe spring thunderstorm).

Here’s the critical, often-misunderstood part, that percentage is not a percentage of the damage. It is a percentage of your total dwelling coverage (Coverage A).

Let’s do the math on a $450,000 home in Sugar Land:

• A 1% Wind & Hail Deductible = $4,500 you must pay first.
• A 3% Wind & Hail Deductible = $13,500 you must pay first.

Our Expert Advice: Look past the monthly premium and find this percentage. Ask yourself, “Do I have $13,500 in cash I’m willing to spend after a 10-minute hailstorm?” If the answer is no, a policy with a 3% deductible is a massive financial risk, no matter how “cheap” the premium is.

Coverage #3: Home Roof Insurance Coverage (The New Fine Print)

 

This is the newest and most critical point of comparison in Texas. Due to the sheer volume of hail claims, many carriers are now treating roofs differently from the rest of the house, even on a Replacement Cost policy.

The Decision: If a storm damages my 15-year-old roof, will I get a full new roof, or just a small check for its “used” value?

Many policies are now being written with Actual Cash Value (ACV) for roofs. This means if a new roof costs $25,000, but your roof was 15 years old, the insurance company might decide its depreciated value was only $10,000. You would be responsible for the $15,000 difference plus your Wind & Hail deductible.

Our Expert Advice: This is a non-negotiable item to evaluate. You must ask your agent, “Is the roof covered for Replacement Cost or Actual Cash Value?” A policy with an ACV roof will be cheaper, but the savings are not worth the massive risk in the greater Houston area.

 

Coverage #4: The “Water Backup” Endorsement

Many homeowners are shocked to learn that water damage from a sewer backup is not covered by a standard policy. After Harvey, Houstonians are especially sensitive to water, and it’s vital to know what’s covered.

The Decision: Am I covered if a city drain backs up and sends water or sewage into my home?

Let’s be clear on the three types of water damage:

1. Sudden & Accidental: A pipe bursts (like during a freeze) or your washing machine hose breaks. This is covered by a standard policy.
2. Flood: Water rising from the ground, a bayou overflowing, or storm surge. This is never covered by homeowners insurance; you need a separate Flood Insurance policy.
3. Water Backup: A city sewer line clogs and sends sewage back up into your toilets and bathtubs. This is not covered by a standard policy.

Our Expert Advice: The “Water Backup” endorsement is one of the most important and affordable coverages you can add. It typically costs very little to add $5,000 or $10,000 of coverage for this specific, messy, and expensive peril. Look for this line item on your quote. If it’s missing, ask for it immediately.

 

Coverage #5: Personal Liability Limits

This coverage isn’t for your house, it’s for your finances. It pays for legal bills and settlements if someone is injured on your property (for example, a guest slips on your pool deck in Kingwood or your dog bites a neighbor).

The Decision: Is the minimum $100,000 liability limit enough to protect my assets and future earnings if I’m sued?

The default limit on many policies is $100,000, which is dangerously low in 2025. One serious lawsuit for a slip-and-fall injury could easily exceed this, putting your savings, assets, and even your home at risk.

Our Expert Advice: We recommend a minimum of $300,000 in liability coverage. Evaluate the cost to increase it from $100,000 to $300,000 or $500,000, it’s often one of the cheapest and most valuable upgrades you can make to your policy.

 

Work With an Independent Agent for the Best Homeowners Insurance Policy

This checklist probably proves how confusing quotes can be. The “best” policy isn’t the cheapest one, it’s the one with the right combination of these coverages for your family.

This is the entire reason to use an independent insurance agent.

• A captive agent (who works for one national brand) can only sell you their one policy and their set of rules.
• As independent agents, we work for you, not an insurance company. We can compare policies from over a dozen different carriers, line by line. We can find the carrier that still offers Replacement Cost on your roof and has a 1% hail deductible option.

Stop guessing. If you’re comparing quotes, let us do the hard work for you.

Contact me for a personalized quote.