How much homeowners insurance should I carry?

The amount. TDI says each kind of cover has a dollar limit. It says to carry enough to replace your home and property after a total loss, because you pay any shortfall yourself. Most companies require you to insure the house for at least 80% of its replacement cost, and some require 100% [1]. Personal property is usually a share of the house limit. TDI's example: you insure the house for $100,000, and the policy covers property at 20% of that. So your property is covered up to $20,000 [1]. A full list of what you own helps you set the amount, and makes a claim easier to file [1].

Replacement cost or actual cash value. This is the part that decides what you get paid. TDI says a policy gives one or the other, and that replacement cost cover is the one to look for. Its example: a roof bought 10 years ago now costs $10,000 to replace. With replacement cost cover and a $2,000 deductible, the company pays $8,000. With actual cash value, the roof may be valued at $7,000 after depreciation. After the $2,000 deductible the company pays $5,000, and you pay the rest. You are out $5,000 instead of $2,000 [1]. Deductible. TDI says the deductible is the part of a claim you pay yourself. On a $1,000 claim with a $300 deductible, the company takes off $300 and pays $700. You may have a different deductible for each kind of cover [1]. On its shopping page TDI adds two things. The higher the deductible, the lower the premium [2]. And most mortgage companies require a replacement cost policy as a condition of the loan [2].

Two Texas holes to check. TDI says a home policy may not cover wind and hail damage if you live on the Texas coast, or in Harris County on Galveston Bay. The Texas Windstorm Insurance Association sells that cover to coastal residents. You may need flood insurance first, and possibly an inspection [1]. TDI also says most home policies do not cover flood damage, so flood is normally a separate policy [1].

What it costs. The TDI pages quoted here explain what changes the price, not the price itself [1][2]. We have no official average premium we can show you yet.

Read the «Policy limits» and «Replacement cost vs. actual cash value coverage» sections of the TDI home guide, then check your declarations page for the dwelling amount, each deductible, and any separate wind or hail deductible.