01Why your lender forces insurance
When you sign a loan, the bank is a co-owner of the property until you pay it off. It requires premiums paid into an escrow account and enough coverage so the collateral still has value after fire or storm. No insurance = the bank can force-place coverage (3–5× more expensive) or start foreclosure.
02The main policy types
| Type | Use | Coverage |
|---|---|---|
| HO-2 | Owner-occ. older | Named perils (narrow) |
| HO-3 | Owner-occ. mainstream | Building "all-risk" + named personal property |
| HO-5 | Owner-occ. premium | Building + contents both all-risk (broad) |
| HO-6 | Condo | In-unit + liability; exterior via HOA |
| DP-3 | Rental / landlord | Dwelling fire form (see next guide) |
03How much to insure — the most common mistake
- Extended Replacement Cost: +20%–25% buffer when material costs rise;
- Guaranteed Replacement: full backstop (some carriers);
- Don't cut coverage to Actual Cash Value (ACV) to save premium — depreciation slashes the payout.
04Deductibles & the wind/hail separate deductible
Base deductible is $1,000–$2,500. But hurricane-zone policies (TX coast, south LA) carry a separate wind/hail percentage deductible (e.g., 1%–5% or a named-storm 2%), meaning wind claims first subtract that % of coverage. Read the contract for a "double deductible": all-peril $1,500 + wind/hail 2%.
05Endorsements worth adding
- Water Backup: sewer backup / sump failure — not in the base form;
- Ordinance or Law: extra cost to rebuild to new code after a loss;
- Equipment Breakdown: HVAC and appliance failures;
- Service Line: underground water/utility line damage;
- Valuable Items: jewelry / collectibles scheduled.
06Flood — not in the standard policy!
No matter how broad HO-3 is, groundwater, storm surge and overflow are always excluded. Buy NFIP (government, 30-day wait) or private flood. LA coast, low-lying Houston and 100-year zones should check the FEMA flood zone first. Check the flood zone before buying — premiums can double.
07Eight factors that move your premium
| Factor | Direction |
|---|---|
| Insurance score | Higher score = lower premium (both states) |
| Roof age | Over 15–20 yrs spikes; new roof saves immediately |
| Distance to fire station/hydrant | Closer = cheaper (Protection Class) |
| Home age & construction | Masonry beats old wood |
| Deductible | Higher = lower premium |
| Claim history | Claims in 5 yrs raise the rate |
| Dog breed / pool / trampoline | Liability risk — may surcharge or decline |
| Bundle | Home + auto same carrier discount |
08The claims process
- Report within 24–48 hours (most carriers take photos in-app);
- Protect the site and prevent further loss (tarp the roof);
- Cooperate with the adjuster, keep repair quotes and receipts;
- RCV policies pay ACV first, then the depreciated balance after repair;
- If unhappy, hire a public adjuster or appeal.
09Save without going bare
Want us to compare 3 carriers, calculate your rebuild cost and check the flood zone? WeChat/WhatsApp: (337) 967-5561 · sophie.z@beyondrealtyusa.com.
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