How Much Homeowners Insurance Do I Really Need—and What Does It Actually Cover?

Wondering how much homeowners insurance you need in Texas? Learn what’s covered, what’s not, and how to choose the right amount of coverage.

If you’re a homeowner in Texas—especially in areas like Mansfield, Fort Worth, or anywhere in the Dallas-Fort Worth metroplex—you’ve probably asked yourself:

“How much homeowners insurance do I really need?”

Or even more importantly:

“What does my home insurance actually cover—and what does it leave out?”

These are smart questions. Too many homeowners find out after a claim that they were underinsured or assumed their policy covered more than it actually did.

Let’s break down everything you need to know to get the right amount of coverage—and peace of mind.

What Does Homeowners Insurance Cover?

A standard homeowners insurance policy (HO-3) includes several key coverages:

1. Dwelling Coverage

This covers the physical structure of your home—walls, roof, floors, built-in appliances, and attached structures like garages.

Covered: Fire, hail, wind, lightning, vandalism, and some types of water damage.

Not Covered: Floods, earthquakes, wear & tear, mold (in most cases).

2. Other Structures

Covers detached structures like fences, sheds, and detached garages—usually up to 10% of your dwelling limit.

3. Personal Property

This protects your belongings—furniture, clothing, electronics—against theft or covered perils, even if you’re away from home.

Covered: Theft, fire, some storm-related damage.

Not Covered: Flood damage, accidental loss (unless scheduled).

4. Loss of Use (Additional Living Expenses)

Pays for temporary housing and extra living expenses if your home is uninhabitable after a covered claim.

5. Personal Liability

Covers you if someone is injured on your property or you accidentally cause damage to someone else’s.

Covered: Dog bites, slip-and-falls, guest injuries.

Not Covered: Intentional harm or business-related liability.

6. Medical Payments to Others

Covers minor injuries to guests—no lawsuit required.

What Doesn’t Homeowners Insurance Cover?

These exclusions are where many homeowners get caught off guard:

• • Flooding (requires separate flood insurance)
  • Earthquakes (requires an endorsement or separate policy)
  • Sewer or water backup (add-on coverage)
  • Foundation issues (unless caused by a covered peril)

• Mold or pest infestations
• Neglect or lack of maintenance

If you’re in the DFW area, consider adding endorsements for:

• Wind/hail deductible buyback (especially if you have an older roof)
• Foundation water damage
• Water backup from drains or sump pumps

So… How Much Homeowners Insurance Do You Really Need?

Here’s how to think about it:

1. Dwelling Coverage = Cost to Rebuild Your Home

Don’t use your home’s market value. You want enough insurance to rebuild from the ground up in the event of a total loss.

This includes:

• Construction labor and materials (which are rising)
• Building code upgrades
• Permits and fees

Work with your insurance agent to estimate your replacement cost value, not market or appraised value.

In North Texas, replacement costs can range from $150 to $250 per square foot, depending on the quality of construction.

2. Personal Property = Value of What You Own

Most policies default to 50–70% of your dwelling coverage, but that might not be enough. Take inventory of what you own. If you have high-value items (jewelry, firearms, art), consider scheduling them separately.

3. Liability Coverage = Your Financial Protection

We recommend at least $300,000–$500,000 in personal liability, especially if:

• You have a pool or trampoline
• You host guests often
• You have a high net worth or future income to protect

Umbrella insurance can extend this liability protection even further.

4. Loss of Use = Temporary Living Expenses

Most policies include 20% of your dwelling limit for loss of use. Make sure it’s enough to cover rent, meals, and transportation for several months.

Don’t Set It and Forget It

Home values, building costs, and risks change every year. Review your policy annually to:

• Update your dwelling limits
• Adjust for inflation
• Add endorsements as needed
• Remove outdated items or over-insured property

Work With a Local Agent Who Understands DFW Risks

At McKnight Insurance Services, we help homeowners in Mansfield, Fort Worth, and throughout Dallas-Fort Worth build customized policies that:

• Accurately reflect their home’s rebuild value
• Cover local risks like hail, water damage, and flooding
• Offer smart coverage—not cookie-cutter packages

We also help you compare carriers and get the best rates for the protection you actually need.

Are you frustrated with your insurance—or unsure if you have the right coverage? Contact McKnight Insurance to speak with a local agent who will walk you through your policy, explain what’s covered (and what’s not), and help you get properly protected.

Let’s make sure you’re covered before the unexpected happens.