Reviewed and approved by Samuel Corso, licensed Texas insurance agent.

Published August 6, 2026 · Updated October 1, 2026

How home insurance works in Texas — the six coverages and your declarations page

If you have a Texas home insurance policy and have never read it closely, this guide explains its parts in plain terms and shows you where to find each one on your own policy.

The short version. The Texas Department of Insurance (TDI) says in its Home insurance guide that most home policies in Texas include six coverages: dwelling, personal property, other structures, additional living expenses, personal liability, and medical payments. The same guide says each type of coverage has a dollar limit, and that the declarations page, the first page of your policy, summarizes your coverages, dollar limits, and deductibles.

Here's what we'll cover: the six coverages TDI describes, how personal liability differs from medical payments, how the dollar limits relate to each other, deductibles, replacement cost versus actual cash value, what a policy may leave out, and how to read your own declarations page.

The six coverages

A Texas home insurance policy combines several types of coverage into one policy. According to the TDI guide, most home policies in Texas include six coverages, described this way.

The first four rows deal with your own house, belongings, and living costs. The last two deal with injuries to other people or damage to their property. The guide says each type of coverage has a dollar limit and that policies pay only up to their dollar limits.

A few practical notes on four of them:

• Dwelling. This is the coverage for the house itself. TDI's guide advises making sure you have enough coverage to replace your home and property if you have a total loss, and says that if you don't have enough coverage, you'll have to pay the difference yourself.
• Other structures. Detached garages, storage sheds, and fences are the examples TDI's guide gives of structures that aren't attached to your house.
• Personal property. Home policies limit what they'll pay for things like jewelry and art, according to the guide, which suggests talking to your agent about adding more coverage if you own expensive items.
• Additional living expenses. Repairs on your home can sometimes take months, the guide notes, and the insurance company pays these expenses only up to the policy's dollar limits for them.

Liability and medical payments are not the same thing

Personal liability and medical payments are two of the six coverages TDI describes for most home policies in Texas, and the TDI guide describes them differently. On liability, the guide says: "Personal liability coverage pays medical bills, lost wages, and other costs for people that you’re legally responsible for injuring." It adds that liability coverage also pays if you're responsible for damaging someone else's property, and that it pays your court costs if you're sued because of an accident.

On medical payments, the guide says: "Medical payments coverage pays the medical bills of people hurt on your property." It adds that this coverage also pays for some injuries that happen away from your home, and gives the example of your dog biting someone at the park.

Read side by side, the liability description depends on your being legally responsible and reaches past medical bills to lost wages, property damage, and court costs. TDI's wording for medical payments covers medical bills of people hurt on your property and some injuries away from home, and does not mention legal responsibility. Each of the two has its own dollar limit, so check both on your declarations page.

How the limits relate to each other

Some dollar limits on a Texas home policy may be set as a percentage of the dwelling coverage limit. Home policies usually pay a percentage of your dwelling coverage limit to repair or replace your furniture, clothes, and other property, according to the TDI guide. Its example is a house insured for $100,000 with property covered at 20% of that, which means personal property insured for up to $20,000.

Additional living expenses can be tied to the dwelling figure too. If your policy covers additional living expenses, the guide says, the coverage might be limited to 10 to 20% of the amount of the dwelling coverage on your house.

A limit that is a percentage of the dwelling figure rises or falls with it. If your dwelling limit is lower than the cost to rebuild, a personal property or additional living expenses limit calculated from it may be lower than you expect as well. The guide also says most companies require you to insure your house for at least 80% of its replacement cost, and that some companies require 100%.

Deductibles: a policy may have more than one

More than one deductible may apply on a home insurance policy in Texas, so look for each one on your declarations page. The TDI guide defines the term: "A deductible is the amount of a claim that you must pay yourself." Its example is a $1,000 claim on a policy with a $300 deductible, where the insurance company deducts $300 from the claim amount and pays $700. The guide adds that you might have different deductibles for each type of coverage.

The Office of Public Insurance Counsel (OPIC) explains in Decoding Residential Property Deductibles that for certain causes of loss, special higher deductibles may apply, and it lists hurricane, named storm, and wind/hail deductibles. TDI's What to know about deductibles says a deductible may be a specific dollar amount or a percentage. OPIC, on a percentage deductible: "The percentage is calculated on the amount of insurance you have on your home, NOT the amount of your claim." So a policy may show one deductible for wind and hail damage and another for other covered losses. If one of yours is a percentage, work out the dollar amount before you need it. How the wind and hail deductible works in Texas works through the arithmetic, and what deductible you should have covers the trade-off between the deductible and the premium.

Replacement cost versus actual cash value

Replacement cost and actual cash value are two ways a Texas home policy can value a loss. Home policies provide one or the other, according to the TDI guide, which defines each:

"Replacement cost coverage pays to repair or replace your house and personal property at current prices."

"Actual cash value coverage pays replacement cost minus depreciation."

Depreciation, the guide explains, is a decrease in value because of wear and age. It gives an example of a roof bought new 10 years ago that has to be replaced after a storm, where the current price for a new roof is $10,000 and the policy has a $2,000 deductible.

These are TDI's own example figures and should be read as an illustration only. The roof and the deductible are the same in both columns, so the difference in the payment comes from the valuation basis. The guide says: "To be fully protected, make sure your policy has replacement cost coverage." It also says that with a replacement cost policy, most companies pay with two checks. The first is for the estimated cost of repairs, minus depreciation and your deductible, and the amount kept for depreciation is paid after the company gets the bill for the finished job. TDI adds that you usually must complete repairs within a certain period of time.

Replacement cost versus actual cash value in Texas goes through it in detail.

What the policy leaves out

Some causes of damage fall outside a home insurance policy in Texas. The TDI guide includes a table of common risks that most policies do and don't cover. In the column of risks most policies don't cover, the guide lists:

• Flooding
• A continuous water leak, along with mold removal except to repair damage caused by a covered risk
• Termites, insects, rats, or mice
• Losses that occur if your house is vacant for the number of days specified by your policy
• Wear and tear
• Earthquakes or earth movement
• Wind or hail to trees and shrubs

The guide notes that coverages vary by company, and says to read your policy or talk to your agent to be sure of your exact coverages. TDI's shorter page, Five things your home policy won't cover, describes wear and tear as damages that happen over time, like rotted boards, cracking window seals, or worn roofs. It also says most policies only pay a certain amount if jewelry, artwork, or electronics are stolen or damaged by fires or storms.

Wind and hail are a special case on the coast. The guide's table lists windstorm, hurricane, and hail among the risks most policies cover, but not if you live on the Gulf Coast. The guide says that if you live on the Texas coast or in Harris County on Galveston Bay, your home policy might not cover wind and hail damage, and that the Texas Windstorm Insurance Association sells wind and hail coverage for coastal residents.

Some gaps may be filled with endorsements. The guide says most companies offer endorsements, or policy add-ons, that let you increase or add coverage. Its list of common endorsements covers jewelry, fine arts, or electronics, backup of sewers or drains, damage to foundations or slabs, extra construction or repair costs to meet local building codes, extra construction costs if your policy doesn't pay enough to rebuild your home, mold removal, and damage from earthquakes. What home insurance doesn't cover in Texas goes through the exclusion list item by item, and does home insurance cover foundation repair covers the foundation endorsement specifically.

TDI's guide says most home policies don't cover damage caused by floods, and suggests talking to your home insurance agent about getting a flood policy from your insurance company or the National Flood Insurance Program. On earthquakes the two TDI pages differ. The guide lists earthquake damage among common endorsements, while Five things your home policy won't cover says you can buy separate policies for floods and earthquakes. See flood insurance in Texas for more on flood.

Reading your own declarations page

The declarations page is where a Texas home policy summarizes itself. In the words of the TDI guide: "The first page of your policy is the declarations page. It has a summary of your policy, including your coverages, dollar limits, and deductibles."

Working down your page, look for the items below. Coverages, dollar limits, and deductibles are the items TDI names, and OPIC's Decoding Residential Property Deductibles adds the dates your policy is effective. The others are items to look for and confirm with your insurer.

• The policy period. The dates your policy is effective.
• The named insured and the property address. Check that they're right, and that anyone who should be on the policy is listed.
• The coverages. The six that TDI describes for most home policies in Texas are dwelling, other structures, personal property, additional living expenses, personal liability, and medical payments, and its guide says each type of coverage has a dollar limit.
• Each deductible. Note whether it is a dollar amount or a percentage, and which losses it applies to.
• The valuation basis. Replacement cost or actual cash value.
• The endorsements. Ask your agent or insurer what each one adds or changes.
• Your lender. If you still owe money on your home, check that the lender shown is correct. See home insurance, escrow, and your mortgage for how that payment flows.

One more document comes with the policy. TDI's guide says Texas has a Consumer Bill of Rights for home and renters insurance, and that your insurance company will give you a copy when you get or renew a policy.

What to do with this

To check a Texas home insurance policy against this guide, start with the declarations page and work through these steps.

• Find your declarations page. Compare the dwelling limit with what it would cost to rebuild your home today. A limit set several years ago may no longer match.
• Turn any percentage deductible into a dollar figure. Then ask yourself whether you could pay that amount after a loss.
• Check the valuation basis. See whether the policy pays replacement cost or actual cash value.
• Read the endorsements list. If you've been assuming coverage for something specific, such as jewelry, a slab, or sewer backup, confirm it there or ask your agent.
• Look at the additional living expenses limit. TDI's guide notes that repairs can sometimes take months, so consider whether the limit would last through a long repair.
• Keep the Consumer Bill of Rights. TDI's guide says your insurance company gives you a copy when you get or renew a policy.

Key facts

• TDI's Home insurance guide says most home policies in Texas include six coverages: dwelling, personal property, other structures, additional living expenses, personal liability, and medical payments.
• The same TDI guide says each type of coverage has a dollar limit and that policies pay only up to their dollar limits.
• TDI's guide ties personal liability coverage to injuries you're legally responsible for, and describes medical payments coverage as paying medical bills for people hurt on your property.
• The declarations page is the first page of your policy and summarizes your coverages, dollar limits, and deductibles, per TDI's Home insurance guide.
• TDI's guide defines a deductible as the part of a claim you pay yourself, and says you might have different deductibles for each type of coverage. OPIC's Decoding Residential Property Deductibles says a percentage deductible is calculated on the amount of insurance on your home.
• According to TDI's Home insurance guide, replacement cost coverage pays at current prices, and actual cash value coverage pays replacement cost minus depreciation.
• TDI's guide lists flooding, continuous water leaks, pests, vacancy losses, wear and tear, earth movement, and wind or hail to trees and shrubs among risks most policies don't cover, and notes that coverages vary by company.
• TDI's Five things your home policy won't cover says you can buy separate policies for floods and earthquakes.

Sources: Texas Department of Insurance, Home insurance guide, Five things your home policy won't cover and What to know about deductibles; Office of Public Insurance Counsel, Decoding Residential Property Deductibles. TDI's Help Line is 800-252-3439. This page is general information, not legal advice; what any policy pays depends on that policy's terms, limits, endorsements, and exclusions.

Take the next step

Reading the declarations page of your Texas home policy is a practical first step before you compare policies, because it shows the coverages, dollar limits, and deductibles you have now.

If reading your page raised questions, how to choose home insurance in Texas covers comparing on coverage as well as price, why your home insurance went up explains what can move the premium, and using an independent agency versus going direct sets out how the two routes work. Credify shows how different carriers handle wind and hail deductibles for your home, side by side.

Get a second opinion on your policy — free. Credify is a licensed insurance agency in Texas that helps you compare home insurance from roughly 20 licensed Texas carriers, so you can see whether your coverage fits your needs. It takes a few minutes, and there's no obligation. 📞 Talk to Credify 24/7.

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