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

Most people buy home insurance once, at closing, in the middle of the most paperwork-heavy week of their life. It renews quietly every year afterwards. Then something happens — a hailstorm, a burst pipe, a dog bite, a fire — and they open the policy for the first time and discover it isn't one thing at all. It's six things, with separate limits, and a settings page at the front.

That front page is the part worth ten minutes of your attention, because almost every question people ask after a loss is answered on it.

Here's what we'll cover: the six coverages that make up a Texas home policy and what each one actually pays for, the difference between liability and medical payments (which trips up nearly everyone), how the dollar limits relate to each other, the two deductibles Texas policies carry, the replacement-cost setting that decides how big your check is, and how to read your own declarations page.

The six coverages

The Texas Department of Insurance (TDI) describes the standard structure this way:

1. "Dwelling coverage pays if your house is damaged or destroyed by something your policy covers."
2. "Personal property coverage pays if your furniture, clothing, and other things you own are stolen, damaged, or destroyed."
3. "Other structures coverage pays to repair structures on your property that aren't attached to your house."
4. "Additional living expenses coverage pays if you have to move while your house is being repaired."
5. "Personal liability coverage pays medical bills, lost wages, and other costs for people that you're legally responsible for injuring."
6. "Medical payments coverage pays the medical bills of people hurt on your property."

Four of those protect your property. Two of them protect you from other people's claims. They are separate buckets with separate limits, and money doesn't move between them.

A few practical notes on each:

Dwelling is the structure itself, and its limit is the number the rest of the policy tends to be built around. It is meant to reflect what it would cost to rebuild your house — not what you paid for it, and not what it would sell for. Those are three different numbers, and only one of them belongs on an insurance policy.

Other structures is the detached-things coverage: a garage that isn't attached, a workshop, a fence, a carport. If it's connected to the house, it's usually dwelling; if it's standing on its own in the yard, it's usually here.

Personal property is everything that would fall out if you turned the house upside down. It's also the coverage most likely to be quietly capped on the things you'd most want back — TDI notes that for jewelry, fine arts, and electronics, "your policy provides some coverage, but it might not be enough to cover expensive items," which is why a separate endorsement exists for them.

Additional living expenses is the one people forget they have. If a covered loss makes the house unlivable, this is what pays for somewhere else to live while it's repaired. After a widespread storm — when repairs queue behind everyone else's repairs — the length of time this coverage lasts matters as much as the amount.

Liability and medical payments are not the same thing

This pair looks redundant on the declarations page and isn't. The difference is fault.

Personal liability responds when you are, in TDI's words, "legally responsible for injuring" someone — and it covers more than their medical bills: "medical bills, lost wages, and other costs." It's the coverage behind the dog-bite claim, the guest who falls on your steps and sues, the tree limb that comes down on the neighbor's car because the tree was already dead.

Medical payments is the smaller, faster one. It "pays the medical bills of people hurt on your property" — and it's designed to work without anyone establishing that you did anything wrong. Someone trips at your house, you hand it to your insurer, the medical bills get handled, and nobody has to decide whose fault it was. It's typically a much smaller limit, and that's the point: it's there to keep a minor accident from becoming a dispute.

How the limits relate to each other

On most declarations pages, the dwelling amount is set first and several of the other limits are then expressed as a percentage of it — other structures, personal property, and additional living expenses commonly work this way. The exact percentages are set by the policy form and are printed as dollar figures on your declarations page, so you don't have to calculate anything. You do have to look.

The consequence is worth understanding: if the dwelling limit is wrong, several other limits are quietly wrong with it. A house insured for less than it would cost to rebuild carries a personal property limit and an additional-living-expenses limit that were sized off that same understated number.

The two deductibles

TDI's definition is the simple one: "A deductible is the amount of a claim that you must pay yourself."

What's specific to Texas is that you almost certainly have two. There's an "all other perils" deductible, usually a flat dollar amount, and a separate wind and hail deductible, almost always written as a percentage of your dwelling coverage rather than a flat figure. On a hail claim — which in Texas is the claim you're most likely to make — the percentage one is what applies, and it's frequently several times larger than the flat one people have in mind. How the wind and hail deductible works in Texas works through the arithmetic; what deductible you should have covers the trade-off between the deductible and the premium.

Replacement cost versus actual cash value — the setting that decides your check

Two policies can show identical coverage amounts and pay very differently after the same loss, because of one setting. TDI states it plainly:

"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 is the whole story. On a fifteen-year-old roof, or a ten-year-old sofa, actual cash value subtracts for age and wear before the deductible is even applied. Replacement cost doesn't. The gap between the two on a roof claim is often the single largest number in the whole transaction, and it's decided years earlier, on a line of your declarations page. Replacement cost versus actual cash value in Texas goes through it in detail.

Worth checking separately: your policy can be replacement cost on the structure and actual cash value on the roof, or on personal property. They are not always the same setting.

What the policy leaves out

Every home policy has a list of things it doesn't cover, and in Texas that list includes some items homeowners routinely assume are in there. TDI's version:

"Most policies don't cover damages from: Flooding, A continuous water leak; policies also won't cover 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"

Several of those gaps can be filled with endorsements — TDI's list of commonly offered ones covers jewelry and electronics, sewer and drain backup, foundations and slabs, building-code upgrade costs, extra rebuilding costs, mold removal, and earthquake damage. What home insurance doesn't cover in Texas goes through the exclusion list item by item; does home insurance cover foundation repair covers the foundation endorsement specifically, because that one behaves differently from the rest.

Flood is the exception that isn't fixable with an endorsement. It needs a separate policy — see flood insurance in Texas.

Reading your own declarations page

TDI: "The first page of your policy is the declarations page. It has a summary of your policy, including your coverages, dollar limits, and deductibles."

That one page is the answer key. Working down it, you're looking for:

• The policy period — the dates the policy is actually in force.
• The named insured and the property address — that they're right, and that anyone who should be on the policy is.
• Coverage A through F (or the equivalent labels) with a dollar limit against each — dwelling, other structures, personal property, additional living expenses, personal liability, medical payments.
• Both deductibles — the flat one, and the wind and hail percentage. Multiply the percentage by the dwelling limit to see the real number.
• The valuation basis — replacement cost or actual cash value, on the structure, on the roof, and on personal property.
• The endorsements list — usually form numbers rather than plain English. Anything you added is here, and anything that isn't here you almost certainly don't have.
• The mortgagee clause — your lender, if the premium is paid out of escrow. See home insurance, escrow, and your mortgage for how that payment actually flows.

And one document that arrives alongside it. TDI: "Texas has a Consumer Bill of Rights for home and renters insurance. Your insurance company will give you a copy of the Bill of Rights when you get or renew a policy." It's short, it's written for consumers rather than adjusters, and most people never open it.

What to do with this

• Find your declarations page and confirm the dwelling limit still reflects what it would cost to rebuild — construction costs move, and a limit set at closing several years ago may not have moved with them.
• Turn your wind and hail percentage into a dollar figure and ask yourself whether you could write that check tomorrow.
• Check the valuation basis on the roof separately from the rest of the structure.
• Read the endorsements list. If you've been assuming coverage for something specific — jewelry, a slab, sewer backup — this is where it either is or isn't.
• Look at the additional living expenses limit and duration, not just the amount, and think about it in the context of a storm that damages your whole neighborhood at once.
• Keep the Consumer Bill of Rights that comes with each renewal.

Key facts

• A Texas home policy is six coverages, per TDI: dwelling, personal property, other structures, additional living expenses, personal liability, and medical payments — each with its own limit.
• Liability turns on fault, medical payments doesn't. Liability covers costs for people "that you're legally responsible for injuring," including lost wages; medical payments "pays the medical bills of people hurt on your property."
• The declarations page is the summary. TDI: "The first page of your policy is the declarations page. It has a summary of your policy, including your coverages, dollar limits, and deductibles."
• A deductible is "the amount of a claim that you must pay yourself" — and Texas policies typically carry two, the second being a wind and hail deductible written as a percentage of dwelling coverage.
• Replacement cost pays "at current prices"; actual cash value pays "replacement cost minus depreciation." The setting can differ between the structure, the roof, and personal property.
• Several standard gaps exist — flooding, continuous water leaks and mold removal, pests, vacancy, wear and tear, earth movement, and wind or hail to trees and shrubs — and many, though not flood, can be addressed with endorsements.
• The Consumer Bill of Rights comes with every policy and renewal, per TDI.

Sources: Texas Department of Insurance — Home insurance guide and Five things your home policy won't cover. 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

The uncomfortable truth about home insurance is that every meaningful decision in it — how much dwelling coverage, replacement cost or actual cash value, which deductible, which endorsements — was made before anything went wrong, and can't be changed after. The declarations page is where those decisions are recorded, and it takes about ten minutes to read.

Credify is a licensed insurance agency in Texas, and we compare coverage across multiple licensed Texas carriers in one short form, with no obligation; each insurer remains responsible for its own products. If reading your page raised more questions than it answered, how to choose home insurance in Texas covers comparing on coverage rather than price alone, why your home insurance went up explains what moves the premium, and using an independent agency versus going direct sets out the difference in how the two work. 📞 Talk to Credify 24/7.