Homeowners Insurance

Think all Homeowners Insurance policies are the SAME?

There are actually 7 standard homeowners insurance policy forms:

HO-1 – Basic Form Homeowner Policy

HO-2 – Broad Form Homeowner Policy

HO-3 – Special Form Homeowner Policy
The most comprehensive form used for single-family homes. The policy provides “All Risk” (Please note: “All Risk” is poorly termed as it is essentially named exclusions; e.g., if it’s not specifically excluded, it is covered) coverage on the home with some perils excluded, such as Earthquake, Sinkhole, Flood, War, Nuclear accident to name a few (Check your policy for complete list of your covered perils).

HO-4 – Renter’s Insurance
The “Tenants” policy form is for Renters. It covers ones personal property, also includes liability and coverage for injury incurred by others.

HO-5 – Premier Homeowner Policy (Open Peril and Most Often Offered by Our Agency)
Coverage similar to HO-3, but more comprehensive. On this policy the contents are also covered on an open peril basis. Therefore, as long as the cause of loss is not specifically excluded in the policy it will be covered for that cause of loss.

HO-6 – Condominium Policy
The form for condominium owners. This covers the condo owner from the “Studs In” on the structure as their association insures the structure and its outsides. Consideration needs to be given to any improvements the owner has made.

HO-8 – Older Houses
The “Modified Coverage” form is for the owner-occupied older home whose replacement cost far exceeds the property’s market value.

There are 6 standard lines of homeowners insurance coverage:

Coverage A – Dwelling
This pays for recovery of your home following a covered loss. Coverage may be for Full Replacement Value or Actual Cash Value (depreciated for age). Covers the value of the dwelling itself (not including the land). Typically, a coinsurance clause states that as long as the dwelling is insured to 80% of actual value, losses will be adjusted at replacement cost up to the policy limits.

Coverage B – Other Structures
This pays for repairs to physical items not a part of the main home following a covered loss. Covers other structure around the property that are not used for business, except as a private garage. Typically limited at 10% to 20% of the Coverage A limit.

Coverage C – Personal Property
This pays for recovery of your household belongings (Your Stuff) following a covered loss. Coverage may be for Full Replacement Value or Actual Cash Value (aka – depreciated for age). Covers personal property, with limits for theft and loss of particular classes of items (e.g., money, jewelry, banknotes, bullion, coins, medals, etc.). Typically limited at 50 to 75% of coverage A limit.

Coverage D – Loss of Use/Additional Living Expenses
This pays your living expenses when you can’t reside in your home following a covered loss.

Coverage E – Liability
This pays the legal costs if you’re found liable for damages to others while they were on your property.

Coverage F – Medical Expenses
This pays for doctor bills sustained by others who were injured while a visitor of your home.

Optional Coverages
Some of the most common examples include Flood, Sinkhole, Earthquake, Equipment breakdown and Sewer backup.