Homeowners (HO) insurance is a contract between the insured and the insurance company; it describes coverages, rights and obligations of the insured and the insurance company in the event of a covered loss. It provides protection through property coverages for the insured dwelling, other structures, personal property and loss of use, and liability coverages for personal liability and medical payments to others. Applicable exclusions and conditions apply.
Basic Coverage
What is a peril?
A peril is a cause of financial loss.
Named-perils coverage: Only perils specifically listed in the policy are covered.
1. Basic Named Perils (1-12)
| 1. Fire | 5. Riot or civil commotion | 9. Vandalism or malicious mischief |
| 2. Lightning | 6. Aircraft | 10. Explosion |
| 3. Windstorm | 7. Vehicles | 11. Theft |
| 4. Hail | 8. Smoke | 12. Volcanic eruption |
2. Broad Named Perils: Basic Named Perils (1-12) plus 13-18
| 13. Falling objects | 16. Accidental discharge or overflow of water or steam |
| 14. Weight ice, snow or sleet | 17. Sudden and accidental tearing apart, cracking, burning or bulging |
| 15. Freezing | 18. Sudden and accidental damage from artificially generated electrical current |
Open-perils coverage: All perils except those specifically excluded are covered. See exclusions below.
Property and Liability Coverages
| Coverage amount | ||
| Section I: Property Coverages | Coverage A: Dwelling | Replacement cost basis if coverage >= 80% of replacement cost (RC) |
| Max [ACV*, (insurance/80% of RC) x loss – deductible] if coverage < 80% of replacement cost | ||
| *Actual Cash Value (ACV) = RC – Depreciation | ||
| Coverage B: Other Structures | 10% of Coverage A | |
| Coverage C: Personal Property | 50% of Coverage A; adjustable up or down | |
| Coverage D: Loss of Use | Vary | |
| Additional Coverages | Most may be included in HO-3 policy w/o additional costs. Not all are available on all policies. | |
| Section II: Liability Coverages | Coverage E: Personal Liability | Bodily injury and property damage that occur on or off premises if the insured is liable |
| Coverage F: Medical Payments to Others | Necessary medical expenses to others |
Additional Coverages
Property Coverages
| Debris removal Reasonable repairs Trees, shrubs and other plants Fire department service charge Property removed Credit card, fund transfer card, forgery and counterfeit money Loss assessment Collapse Glass or safety glazing material Landlord’s furnishings Ordinance or law Grave markers Refrigerated products coverage Inflation coverage Limited fungi, other microbes or rot |
Liability Coverages
| Claim expense First aid expense Damage to property of others Loss assessment |
Exclusions
Perils generally excluded
| Ordinance or law Earth movement Water damage, including flood Power failure Neglect War Nuclear hazard Intentional loss Wear and tear, deterioration Inherent vice, latent defect, or mechanical breakdown Rust, mold, wet or dry rot Smog or smoke from agriculture smudging or industrial operations Release, discharge or dispersal of contaminants or pollutants Settling, cracking, shrinking, building, or expansion of pavement, patios, foundations, walls, floors, or ceiling Birds, vermin, rodents, or insects Animals owned or kept by an insured |
Conditions
Property Coverages
| Duties after loss Loss settlement Loss deductible Policy period |
Liability Coverages
| Limit of liability Duties after occurrence Policy period |
Common policy conditions
| Cancelation Nonrenewal |
Endorsements
Additional coverages or policy provisions available at an additional cost
| Replace cost for personal property Inflation protection Earthquake endorsement Water backup coverage Building law and ordinance coverage Personal injury Open perils |