Homeowners (HO) Insurance

HO insurance is a multi-line policy. It covers both property and liability insurance under the same contract.
Broad Structure of the policy is as under:
1. Part 1 - Declarations Page
2. Part 2 - The Insurance Service Office (ISO) policy containing the following sections:
  1. Definitions
  2. Section 1 - Property Coverages
    1. Coverage A - Dwelling
    2. Coverage B - (Appurtenant) Other Structures
    3. Coverage C - Personal Property (also referred to as Contents Coverage)
    4. Coverage D - Loss of Use (pays for additional living expenses when an insured residence is rendered uninhabitable due to a covered loss, or if a covered loss prompts a civil authority to evacuate the covered property)
  3. Section 2 - Liability Coverages
    1. Coverage E - Personal Liability (Coveres claims due to bodily injury or property damage to a third party by the insured’s negligence, on or off an insured property. It also includes legal representation or counsel in case of a lawsuit.
    2. Coverage F - Medical Payments to Others ( Pays the medical and funeral expenses of others, regardless of fault. Coverage F is designed to extend funds for medical expenses before an injured party feels it is necessary to file a liability claim or a lawsuit)
  4. Section 1 and II - Conditions and
  5. Endorsements
Eligibility:
1. Owner occupied: At least one named insured must occupy the home; and
2. The applicant must purchase both property and liability coverage
3. One to four unit dwelling structure
4. Property must not have abnormally high loss exposure
5. Property must have a valuation of at least $25k
6. Maximum of two boarders or roomers per family
7. Not eligible: seasonal, vacation and vacant property
Insured: An insured under the policy includes
1. relatives of the insured
2. Person under the age of 21 who are in the care of the named insured or in the care of the relatives residing in the home
3. A full-time student who was a resident of the house before moving out to attend the school and who is under the age of 24 (if a relative of the named insured) or 21( if in the care of the insured or in the care of a relative residing in the home)
Perils Insured Against
1. Basic : Fire, lightening and internal explosion
2. Basic (with extended coverages): REVVV C SHAW
  1. Riot
  2. Explosion
  3. Vehicles
  4. Volcanic Eruption
  5. Vandalism and Malicious Mischief (VMM)
  6. Civil Commotion
  7. Smoke
  8. Hail
  9. Aircraft
  10. Windstorm
3. Broad (HO-02):Basic with extended coverage + BIG AFFECTT
  1. Burglar Damage
  2. Ice, Snow and Sleet Weight
  3. Glass Breakage
  4. Accidental Discharge
  5. Falling Objects
  6. Freezing of Pipes
  7. Electrical Damage
  8. Collapse
  9. Tearing Apart
  10. Theft
4. Special (HO-03): Provideds Coverage A and B on Open peril basis. This is the standard and most commonly used form. Exclusions are WE WIN PONG
  1. Water Damage
  2. Earth Movement
  3. War
  4. Intenional Loss
  5. Neglect
  6. Power Failure and Interruption
  7. Ordinance of Law
  8. Nculear Hazard
  9. Government Action
    
    Settlement: Coverage A and B settlements are on Replacement Cost basis (with 80% co-insurance requirement) and Coverage C settlement is on ACV basis.
    Other Coverages: Coverage D (Loss of Use), Coverage E (Personal Liability) and Coverage F (Medical Payments to Others) are also provided.
5. Contents Broad Form (HO-04):
  1. More commonly known as Renter’s insurance.
  2. Protects contents and personal liability of renters occupying a building as a non-owner.
  3. HO-04 does not provide Coverage A and Coverage B. However, Coverages D (loss of use), E (Personal Liability) and F (Medical Payments to Others) are provided.
  4. Covers same perils as under Coverage C of HO-03
  5. Loss settlement is on Actual Cash Value (ACV) basis.
6. Comprehensive Form (HO-05):
  1. Same as HO-03 Form, but apart from Coverages A and B, it also provides Coverage C on open peril basis.
  2. Coverage A and B are settled on Replacement Cost basis, whereas Coverage C is settled on ACV basis.
  3. Coverage D (Loss of Use), Coverage E (Personal Liability) and Coverage F (Medical Payments to Others) are also provided.
7. Unit-Owners Form (HO-06):
  1. Designed to protect contents of condominium and co-op owners, including townhomes.
  2. Coverage A includes alterations, appliances, fixures and improvements contained within the residence premises. Essentially, items and property for which the insured is responsible, and not the HOA, are covered.
  3. Coverage B is not provided since this is typically the responsibility of the HOA.
  4. Coverage A and C are covered on Named peril basis (Fire, lightning, extended coverage perils and broad form perils)
  5. Loss settlement: Coverage A on replacement basis, Coverage C on ACV basis.
  6. Coverage D (Loss of Use), Coverage E (Personal Liability) and Coverage F (Medical Payments to Others) are also provided.
  7. The policy also provides loss assessment coverage.
8. Modified Coverage Form (HO-08):
  1. HO-08 is used when the replacement cost of a home is far greater than the market value. This can occur when rare, toxic or otherwise expensive materials are used in the home’s construction.
  2. Ho-08 settles Coverage A and B claims on Functional Replacement Cost. It will pay for the lesser of (a) policy limt or (b) the actual cost to repair or replace a loss using common construction materials or their equivalents.
  3. Coverage C is settled on ACV basis.
  4. HO-08 provides coverages A, B and C on named-preils basis (Fire, lightening and Extended Coverage Perils).
  5. Coverage D (Loss of Use), Coverage E (Personal Liability), and Coverage F (Medical Payments to Others) are also provided.
  6. Exclusions include the nine common homeowners policy exclusioins.