Texas insurance guide
HO-A vs HO-B vs HO-3 in Texas
Your insurance form determines whether a water damage claim settles at replacement cost or depreciated value. That single distinction can mean a $12,000 difference on one event.
HO-A (Basic)
Actual Cash Value
Named-peril coverage on a limited list: fire, hail, wind, theft, and a few others. Does not automatically cover sudden water discharge from plumbing. Claims settle at actual cash value, meaning depreciated, not replacement. A 15-year-old water heater that fails is valued at what a 15-year-old water heater is worth, not what a new one costs.
Example
A burst supply line causing $18,000 in damage settles at roughly $6,000 after depreciation. You cover the gap.
Least coverage. Lowest premium. Largest out-of-pocket exposure.
HO-B (Broad)
Open Peril Dwelling, Replacement Cost
Open-peril coverage on the dwelling, named-peril on contents. Settles at replacement cost. This was historically the Texas gold standard for water and foundation claims. Many carriers have phased it out in favor of HO-3, but some still write it. Worth asking your carrier by name.
Example
The same $18,000 supply line claim settles at $18,000. You pay only the deductible.
Replacement cost eliminates the depreciation gap. Ask your carrier if they still write this form.
HO-3 (Special)
Open Peril Dwelling, Named Peril Contents
Most common todayOpen-peril on the dwelling, named-peril on contents, replacement cost. The national standard and the form most Texas carriers now default to. Your dwelling is covered against anything not specifically excluded.
Example
An unusual loss not on a named-peril list is still covered, as long as the policy does not specifically exclude it.
Broadest standard coverage. The default for most Texas carriers today.
The smart shutoff discount applies on all three forms.
Regardless of whether you carry HO-A, HO-B, or HO-3, the carrier-recognized certificate qualifies you for the water-damage credit. But if you are on HO-A, the device protection itself is even more critical because your claim settlement will be depreciated. Prevention is worth more when your coverage pays less.
Frequently asked questions
What is the difference between HO-A, HO-B, and HO-3 in Texas?
HO-A is named-peril with actual cash value (depreciated). HO-B is open-peril on the dwelling with replacement cost. HO-3 is open-peril on the dwelling, named-peril on contents, with replacement cost. HO-3 is the most common form in Texas today.
Does the smart water shutoff insurance discount apply to all Texas policy forms?
Yes. The carrier-recognized certificate qualifies you for the water-damage credit on HO-A, HO-B, and HO-3 forms. The discount applies the moment the certificate is on file with your insurer.
Why does the policy form matter for water damage claims?
The form determines whether your claim settles at replacement cost or depreciated actual cash value. On HO-A, a burst supply line causing $18,000 in damage might settle at $6,000 after depreciation. On HO-B or HO-3, the same claim settles at $18,000.
Free quote
Texas insurance is up 46%. The credit is sitting there waiting.
A certified smart shutoff install qualifies you for $300 to $600 in annual insurance credits. Most homeowners earn back the full install cost inside 24 months.
15-minute call, same-week install
Fill out the form and we will get back to you within one business day with your carrier-specific discount estimate.