1. Chapter 19 Principles of Real Property Insurance

2. Risks of Property Ownership  Loss of property due to fire, wind, water, vandalism or other hazards  Loss of use  Liability loss resulting from negligence in the use of the property  Financial loss, particularly the inability to make mortgage payments, as a result of disability or death of a wage earner

3. Property Insurance  Direct Losses  Replace damaged property  Indirect Losses  Living or businesses expenses  Liability Insurance  Against injury lawsuits

4. Texas Homeowners Insurance  Can buy policy for house only  OR coverage that includes:  Dwelling & additional buildings  Personal property  Liability ($25k - $1M)  Medical Payments for others  $500 - $5,000  Loss of use – 20% of house insured value

5. Types of Texas Homeowners Insurance Coverage  HO-A  Limited coverage for home & contents  HO-B  Replacement coverage for most types of damage except listed  HO-C  Most coverage  Most expensive

6. Most Texas policies cover losses by:  Fire  Lightning  Vehicles  Aircraft  Vandalism  Theft  Explosion  Smoke  Wind  Hail  Water damage (sudden/accidental)

7. Most Texas policies DO NOT cover losses by:  Flooding  Earthquakes  Termites  Animals  Wind/hail damage to landscaping  Normal wear/tear

8. Other Texas Residential Policies  Renters  Personal property  Living expenses  Condo  Same as renters  Plus coverage for owner improvements  Townhouses  Individual policy OR  Part of association master  Mobile Homes  If no wheels or on foundation, regular policy  If wheels, Mobile Owners policy

9. Cash Value vs. Replacement  Cash value  Payment of current market price  Replacement value  Pay for new (similar) item

10. Other Types of Insurance  Flood insurance  Offered by National Flood Insurance Program  Lenders may require it  Hurricane & Windstorm Insurance  Texas Windstorm Insurance Association  If insurer won’t provide coverage  Earthquake insurance  Cheap in TX b/c of low probability

11. Factors that Affect the Premium  Age of home  Condition of home  Replacement cost  Construction materials  Home location  Quality of local fire dept.  Your claim history