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DWELLING FIRE INSURANCE

Generally people that own and live in their home purchase a homeowner’s policy.  With secondary homes and rental properties many people insure the home with a dwelling fire policy.

The most common fire insurance policies are the TDP Form 1, 2 and 3.  The TDP stands for Texas Dwelling Policy. With all three forms you can insure the dwelling and your personal property.  The major differences in the three forms are the perils insured against and how the insurance company calculates the claim amount.

The TDP Form 1 is an actual cash value policy.  Actual cash value means the insurance company will depreciate or in other words deduct the value of your loss according to the condition and age of the dwelling immediately prior to the loss.  The TDP 1 is also a named peril policy which means the policy lists the perils it covers. The following is a brief list of the covered perils of a TDP 1. There are limitations and exclusions to these insured perils.  The perils are:

  • Fire & Lightning
  • Sudden & Accidental Damage from Smoke
  • Explosion
  • Aircraft & Vehicles
  • Riot and Civil Commotion
  • Vandalism & Malicious Mischief
  • Windstorm, Hurricane & Hail if not excluded in the coastal areas

The TDP Form 2 is an actual cash value policy also, but the following perils with limitations are added:

  • Collapse of Building
  • Accidental Discharge, Leakage or Overflow of Water or Steam
  • Freezing
  • Breakage of Building Glass
  • Falling Objects

The TDP Form 3 has actual cash value for your personal property.  The TDP Form 3 insures your personal property for the similar perils as the TDP form 2, but the majority of the dwelling will have replacement cost coverage with all-risk with exclusions coverage.  This means there would be no depreciation for fire insurance except for a few items like wall to wall carpeting, cloth awnings and fences. The TDP 3 states “We insure against all risks of physical loss to the property described in Coverage A (Dwelling) unless the loss is excluded in General Exclusions.

As a result, the superior coverage is the TDP form 3.

Warning: The TDP 1, 2 and 3 will have a vacancy clause.  If your dwelling is vacant for 60 or more days, the perils of vandalism or malicious mischief, fire and lightning are removed.  You can get these coverages by buying a vacant dwelling policy, but the vacant building policies are typically more expense. For more info about fire insurance, call today.

Mike’s Home Insurance Tip

One of your biggest investments is your home. Be sure you have adequate insurance coverage. The homeowner's policy excludes the flood peril. Some of the statistics are alarming:

1. The average 30-year mortgage has a 1% chance of a fire and a 26% chance of a flood loss.

2. Over half of all recent flooding events have occurred in flood zones B, C, or X.

3. Over 90% of all disasters involve flooding.

4. Federal Disaster Assistance is a loan that must be paid back.

Dwelling Fire Insurance Alvin TX