To determine the deductible amount for a percentage deductible in Texas HO-B, what must be applied?

In Texas homeowners insurance, particularly within the HO-B policy, the deductible for a percentage deductible is typically calculated based on the Coverage A limit of liability. Coverage A refers to the dwelling coverage, which is the amount that the insurance will pay for damage to the home itself.

When a policy includes a percentage deductible, this percentage is applied to the Coverage A limit instead of the total claim amount or any other figure. For example, if a home has a Coverage A limit of $300,000 and a deductible of 5%, the deductible would amount to $15,000. This approach helps ensure that the deductible is aligned with the value of the property that is being insured.

In contrast, other options like the Coverage B limit, which pertains to other structures on the property, the total claim amount, or the actual cash value of the loss, do not reflect the specific structure and risk parameters covered by the HO-B policy. Thus, using the Coverage A limit of liability establishes a consistent and fair baseline for calculating deductibles within this specific insurance framework.