Homeowners Insurance Price Comparisons

(March 2006)

Introduction

Texas law does not require you to purchase homeowners insurance. However, if you are financing your home, your lender may require you to purchase insurance.

Understanding Rates

Insurance companies base your premium on factors such as the replacement cost of your home, its construction materials, the area where you live, your claims history, your credit score, and local fire protection.

How to Use the Price Comparisons

This guide can help you compare price estimates among companies that sell homeowners insurance to new customers in Texas. The table lists companies and annual price estimates for eight hypothetical homeowners with $100,000 coverage on the house, at least $40,000 on its contents, and a 1 percent ($1,000) deductible.

Companies can sell several types of policies, 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 the HO-B. For instance, HO-A Amended policies may include replacement cost coverage and coverage of damage from "sudden and accidental" water discharges. These are not covered by the base HO-A policy.

HO-B policies provide replacement cost coverage for most types of damage, except those specifically excluded in the policy. In general, the HO-B policy provides the most coverage for the price.

HO-C policies provide the most extensive coverage, but are more expensive than other types of policies.

Other approved policies are policies offered by companies that the Commissioner of Insurance has approved for sale in Texas. Coverage provided by these policies may differ considerably from one another.

To compare coverages included in policies approved for sale in Texas, view the Office of Public Insurance Council website

www.opic.state.tx.us

Homeowner Profiles

The homeowner profiles may not match your situation exactly, but they provide a way to compare prices. View the estimates for the homeowner profile that most closely matches your situation. The prices shown are estimates given to TDI by the companies and are based on a limited set of criteria. They are not the exact amounts you will be quoted. Your premium will vary according to your individual circumstances and will likely be higher than the estimates listed.

• Owner 1: Owns a new brick veneer home
• Owner 2: Owns a new frame home
• Owner 3: Owns a 6-year-old brick veneer home
• Owner 4: Owns a 6-year-old frame home
• Owner 5: Owns a 15-year-old brick veneer home
• Owner 6: Owns a 15-year-old frame home
• Owner 7: Owns a 25-year-old brick veneer home
• Owner 8: Owns a 25-year-old frame home

Financial Rating

A.M. Best Co.´s rating of the financial strength and operating performance of each company. Reprinted by permission. Best´s ratings are subject to change and are current only as of the publication date. For current rating information, call A.M. Best or visit its website

1-908-439-2200

www.ambest.com

Ratings Classifications

A++ and A+ mean Superior

A and A- mean Excellent

B++ and B+ mean Very Good

B and B- mean Fair

C++ and C+ mean Marginal

C and C- mean Weak

NR means the company was not rated by A.M. Best.

A.M. Best Co. is not responsible for errors in presentation or content and does not endorse this publication in any way.

Complaint Index

How consumer complaints received by TDI against each company compare to the average, with an index of 1.00 as average. Below 1.00 means fewer complaints than average. Above 1.00 means more complaints than average. The complaint index is based on 2004 data. For the current complaint index, view the price comparisons on our website.

How to Find the Best Rate

• Get quotes from several companies before you buy. Include independent agents in your search. Some agents only represent a single company or company group. Independent agents may represent several companies.
• Consider higher deductibles. You can save money on your premiums by increasing your policy deductibles, but you´ll have to pay more out of pocket if you have a claim. You´ll need to have money readily available (personal savings, ability to borrow from relatives or friends, etc.) to pay your out-of-pocket expenses.
• Ask your agent about discounts. You may be eligible for discounts for an impact-resistant roof, security system, and fire sprinkler system, etc. Some companies may offer discounts if you have multiple policies, a newer home, or a good claims history.

Before You Buy a Policy, Remember

• In addition to cost, consider other factors, such as the company´s financial strength and complaint history.
• Coverages can vary from policy to policy. Make sure you understand what coverages are included in the policy. Also, make sure your coverage is adequate to replace your house and property if they are destroyed. The amount of coverage you buy should be based on your home´s replacement (rebuilding) cost, which may be different from its market value.
• Don´t cancel a policy until you have a new policy in effect.
• Answer all questions on the application truthfully. Wrong information could cause an incorrect price quote or a denial or cancellation of coverage.

Unfair Discrimination

An insurance company cannot deny, refuse to renew, limit or charge more for coverage, or unfairly discriminate because of your race, color, religion, or national origin. A company also may not discriminate because of your age, gender, marital status, geographic location, or disability or partial disability, unless the refusal, limitation, or higher rate is based on sound underwriting or actuarial principles. This means the company must have valid evidence that you present a greater risk for a loss than homeowners it is willing to insure.

TDI rules prevent companies from denying coverage based on the age and value of your home. However, companies may deny coverage because of the condition of the dwelling, including the plumbing, wiring, and heating and air conditioning systems.

Having Trouble Finding Insurance?

Don´t give up if a company turns you down. Companies have different standards for accepting new customers. For help finding homeowners insurance, visit or call

www.helpinsure.com

1-866-695-6873

Helpinsure.com is a free service of the Texas Department of Insurance.

For More Information

• TDI offers a variety of insurance-related publications and services. Publications are available in alternate languages and formats and on our website.

• 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 website 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

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 website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.

For more information, contact: ConsumerProtection@tdi.state.tx.us