To continue on the overview of the policies available for Homeowners Insurance Coverage in Texas, today we will discuss the HOA, HOA Plus and HOA Enhanced Policies.
All of the HOA policy forms are what is called “Named Peril Coverage”. Which means, if it is not named as covered on the policy, then it is excluded. The basic HOA policy is very limited in nature. The basic named perils are Fire, Lightning, Windstorm, Hurricane, Hail, Explosion, Damage by Vehicles, Damage by Aircraft, Riot and Civil Commotion, Smoke and Vandalism. Please note there is no coverage for water damage of any kind and no replacement cost coverage. Again, this policy is used mainly for older homes in poor condition where better coverage is not available.
Most companies that use the HOA Policy form actually write it as a HOA Plus or HOA Enhanced Policy. The terms “Plus” or “Enhanced” are interchangeable and vary by company. They add significant coverage enhancements to the policy and it becomes an excellent option for homeowners insurance in Texas. The coverage enhancements generally included a substantial increase in the named perils, the addition of water damage coverage for sudden and accidental discharge of water (not slow leaks), backup of sewers and drains, foundation coverage, replacement cost coverage and more. When these endorsements are added, this becomes an excellent policy. What is important to remember is that if the coverage is not named in the policy, it is not there. You have to be certain that the coverage I mentioned above is included to protect your interest as a homeowner.
We will continue with the HOB policy on our next post.