Dallas/Ft. Worth Financial Planner Fee Only CFP, www.HeritageFinancialPlanning.com, Steve Blankenship, CFP Addresses the Change in Homeowners Insurance in the State of Texas.
Dallas, TX (PRWEB) (PRWEB) October 6, 2005 -- With the recent devastation caused by hurricanes Katrina and Rita, a renewed focus has been placed on homeowner’s insurance. As those affected by the hurricanes are beginning to pick up the pieces after an unprecedented amount of devastation, policyholders are beginning to look at their coverage in an attempt to understand their level of coverage. Residents of Texas should be particularly cautious as recent changes with the regulations that govern homeowners insurance in Texas have changed significantly.
Until the last few years, the State of Texas (yes, the State of Texas) wrote the homeowner’s insurance policies for every company in Texas. Each homeowner in the State of Texas had the same policy with the only difference being how high you wanted to set your deductible and the level of coverage you wanted. Now, when you see a difference in rates for homeowner’s insurance, it makes sense to look a little deeper. Chances are that you are purchasing a policy with reduced coverage or a policy that may not cover certain important items.
When the mold crisis hit the state of Texas several years ago and that catastrophe was followed by a large hailstorm in Dallas in April of 2003, things went from bad to worse for the insurance companies. I doubt any of us are shedding too many tears for the insurance industry but in fairness, the State of Texas set these companies up for financial difficulty when they wrote the policies, interpreted the policies for the companies and when things got bad financially, hung them out to dry.
Today, most companies in Texas are selling what is called and HO-A homeowner’s policy which is a stripped down version of what the State of Texas required for years. While a number of companies have “modified” their new HO-A policies to provide some increased protection, the truth of the matter is that the coverage you have today is likely less than what you had several years ago.
One major exception to this HO-A policy is the HO-W policy sold by State Farm. Thought by many to be the “Cadillac” of homeowner’s insurance policies in Texas, the HO-W does provide greater coverage than most of the policies available in the marketplace and offers homeowners the opportunity to add additional coverages not available on the HO-A policy. Unfortunately, if you are not already a State Farm customer or meet the company’s strict criteria, they will not sell you a homeowner’s policy at this time in most of Texas.
So what are the big differences in today’s policies? Probably the biggest difference is the level of coverage for water damage to your home and the circumstances that would allow water damage to be covered and not covered is often the biggest difference. Water damage to homes is an all too common occurrence and an expensive problem to fix. Many homeowners are learning the hard way that where they once had broad coverage for water damage now they may have hardly any coverage depending on the nature of how the water damage occurred. With this said, flood coverage is always excluded in coverage as so many victims of Rita and Katrina are learning.
In the end, the main issue is to understand that homeowner’s insurance in the State of Texas is no longer a simple apples-to-apples comparison. The cost and the coverage varies widely from company to company. To compare your coverage against other companies go to the following website provided by the Texas Department of Insurance www.OPIC.state.tx.us/hoic.php to compare the nuts and bolts of each company’s policy.
Steve Blankenship, CFP®, a nationally recognized financial planner, is conveniently located in the heart of the DFW Metroplex. Located in historic Grapevine, Texas, Steve’s firm, Heritage Financial Planning, offers fee-only financial planning to people from all walks of life.
Steve has been named “One of the Best Financial Planners in Dallas/Fort Worth” by D Magazine and has been featured on the cover of Financial Planning Magazine. He can be reached at (817) 410-5725. For more information, visit www.HeritageFinancialPlanning.com.
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