Homeowner’s Insurance

The HO-3 is the most popular form of coverage used in the marketplace. It provides insurance coverage on an "Open Perils” basis, which means the policy is triggered by any peril that is not specifically excluded. Typically excluded perils include flood, sinkhole and water seepage. Many policies also exclude coverage for mold liability, but will allow the coverage via endorsement for an additional premium.

All property is typically covered on a "replacement cost” basis, which means the insurer will pay to repair or replace the property to an "as new” condition.  Most mortgage providers will require the home to be insured on a replacement cost basis. 

The contents of your home are not insured on an "open perils” basis, but are insured on a "named perils” basis. This means the loss must be a result of one of the 16 named perils to be covered. Most insurers also have "sub-limits” applied to items like jewelry, firearms, and art collections. The sub-limit that may be as low as $2,500 can be overcome by scheduling these specific items for an agreed value that is normally based on a current appraisal.

The HO-5 Form is similar to the HO-3 but removes many of the limitations of the HO-3, and expands the coverage on contents from "named perils” to "open perils”. The HO-5 includes the coverage thatis normally required as an endorsement on the HO-3 form. Also, the sub-limits that apply to some contents on the HO-3 do not apply on the HO-5. Since this form offers broader coverage, insurers tend to be more restrictive in their underwriting which means the insured property must be newer, well cared for and in close proximity to a fire department.

The HO-6 form is used to insure condominium units and town homes that are in an association that provides a master policy insure the outside wall, roof and common areas of the community. It provides coverage in the home from the studs in (drywall, floor covering and cabinetry) and the owner’s contents.

An HO-8 Form is used for historical homes and older homes that will unlikely qualify for an HO-3 or HO-5 policy. The Perils insured against are reduced from 16 to 10, and the coverage is based on "actual cash value” which means replacement cost minus depreciation.

All of the forms mentioned will provide personal liability and medical payments with limits selected by the policyholder and physical damage coverage for unattached structures such as freestanding garages, workshops, gazebos or other structures.

For most consumers, their home may be the largest asset they own and protecting it properly is a serious matter. There are many companies that offer different types of homeowner policies. 

Contact us before you purchase to get the information needed to protect your home and your liability.