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Houston - House insurance

homeowner insurance, renter insurance, mrtgage insurance. What you need to know about property insurance in Texas.

A normal household is likely to contain stereos, TV's, computers, watches, some jewelry, skis etc., items which would be destroyed in a fire or in the case of theft of personal property.
Liability for anyone who might injure him or herself in a house also needs taking into account. These two scenarios are options homeowners take on top of the mortgage insurance.
Selecting a insurance company and determining coverage is the homeowner's responsibility and should be dealt with as soon as the seller accepts an offer. You can shop around for the best deal and both the lender and real estate agent will offer referrals.
The coverage you should be working towards should be enough to replace the home and will be determined in various options within the mortgage lender requirements.

Title insurance
You must also obtain a title insurance to protect the home purchase transaction. This is a one-time premium paid to a title company that guarantees your ownership and that no future claims may arise. As the home passes from one person to another, the new ownership takes place when the title is transferred.
Should a lender be involved in the purchase, they will require title insurance to protect their interest. Special endorsements for condominiums in particular are often required.
Title insurance protects a homeowner from any loss incurred due a defect in the title. This could include any problem such as forgery, liens or legal rights on the property, any legal errors and errors which may have been made by recording clerks. Boundary issues, undisclosed heirs, improper interpretation of wills, deed description... These are just a few of the potential reasons of why title companies play an important role in protecting your deed descriptions.
It is imperative to ensure you have this cover, as it is the most effective protection against any past claims.
There always are exclusions in any coverage, and title insurance is no exception. Read the cover options and if you feel the need, discuss with the closing agent or escrow agent (see glossary in the Housing typology section).
Your lender will usually request specific endorsements to be included in their lenders title policy.

Contents insurance
This is similar to the homeowner's contents insurance but is specific to renters. Your landlord usually requests a security deposit which is held and used to cover any damage or wear and tear on the property which is his form of insurance.
Your rental insurance will cover such things as clothing, furniture, personal property and electrical items, against smoke or fire effects, lightening, vandalism, theft, explosion, water or wind damage. For more valuable and itemized effects or collector's items, you may need to extend cover under a ‘Scheduled Personal Property Endorsement’. Often, in this case, the company will dispatch an appraiser to discuss valuation, and in the event of a claim, an appraiser will be sent to assess the damage.
On the normal insurance cover, the company is likely to include your value predictions and will, for a nominal amount, cover your household goods on a replacement value. This acts as a reassurance when in the event of disaster; your old $250 sofa now costs $850, a similar likelihood to the value of all your belongings.
Around $200 - 300 insurance premium per annum should be considered for an apartment rental cover in Houston.
External factors such as location, crime rate, age of buildings, wiring etc. may influence the premiums.

Renter's insurance 
Although you do not own the actual “premise” in a condominium situation, you own the “air space” within the exterior walls. It is still important therefore to extend your cover to title insurance (see description above) to ensure that your interests in the property are protected. Under usual circumstances, a title search is extended upon purchase of a condominium that should reveal any defects of deeds as well as any problems or liens that may be outstanding against the complex or condominium building. In this instance, it could also include any previous litigation or unpaid bills.

House insurance 
Normal homeowner's insurance applies for content and building insurance.
Home buyer's protection (otherwise known as Home Warranty or Electrical System Insurance).
This is a common feature in the USA, and Houston is no exception.
Home warranty is available from many companies and you will receive from (or can ask for) your mortgage lender, your real estate agent, your car insurance company or friends for recommendations.
Home warranty protection is a system whereby you pay a yearly premium and are then protected against potentially huge repair bills if and when a system or appliance fails in your home.

Standard inclusions are usually:
Central air conditioning (electrical)
Garbage disposal
Water heater
Electrical system
Trash compactor
Built-in microwave
Instant Hot Water Dispenser
Circulating pumps
Toilet tanks and bowls
Sump pumps
Pest control
Available for added charge:
Pool/Spa equipment
Kitchen refrigerator
Well pump
Garage door opener (usually electric in the USA)
Seller's coverage (an insurance over the period when selling the property, usually till close
of sale or 180 day period)

The premium for warranty protection usually starts at about $290 per annum for a basic contract increasing by quote for your specific systems.
On top of the basic premium usually paid yearly in advance, you pay a pre-determined call-out fee to the technician contracted by your Warranty Company in the region of $45 per service call.
This protection allows you the ease of a one-call service in an unfamiliar destination reducing the risk of being badly treated by a disreputable contractor.
Always check the inclusions/exclusions carefully in the small print of your protection contract and use a reputable or recommended company, rather than the first telesales person to contact you on moving into your new home.

Mortgage insurance
House or mortgage insurance is required by the mortgage lender on any property that they finance (usually on property with less than a 20% downpayment).It insures your property and its contents against fire, theft and other losses, depending upon coverage.This applies for a primary residence, however, if you are looking at a second property or an investment property, you may find that the downpayment required is larger to avoid mortgage insurance. This insurance is included in the monthly mortgage payment.
Houston, due to its proximity to the coast, has designated flood areas and plains. Should you be in one of these regions, the lender requires proof of National Flood Insurance Program coverage. In this case, the Federal Government requires the homebuyer to take out flood insurance. The flood plains are re-evaluated from time to time and can be checked within the City of Houston (see links below) or through the insurance company. Should your house lie outside the city limits you can contact the Harris County Building Permits Department (see links below).
If the downpayment on your mortgage is less than 20%, your mortgage lender will also add on private mortgage insurance (PMI) coverage. This protects the lender if the eventuality arises, whereby you default on your mortgage payments. Even if you are not using a lender and insurance is not mandatory, the law of averages suggests that you should have cover on premise and rebuilding and content replacement costs.
In brief, forms of insurance are as follows:
Basic coverage, which provides coverage against fire or smoke damage, lightening, hail and windstorm, glass breakage, explosions, riot or a civil commotion, aircraft damage, vehicle damage, malicious mischief, vandalism, theft and liability for third party injury whilst on the premises.
Broad coverage, which includes falling objects, ice snow and sleet damage, freezing and one off situations within the plumbing, heating and air conditioning systems.
Comprehensive coverage, which covers the above plus most eventualities - except natural disaster such as flood, earthquake, war and nuclear attack.

  • For flood management information:
    City of Houston Flood Management

    Tel: + 1 (713) 535 7605 + (1)  713 535 7979
  • Harris County Building Permits Department:
    Tel: + 1 (713) 956 3007
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