Home Owner Insurance or Hazard Insurance mainly covers the damage caused by fire to the house, so some people also call it Fire Insurance. In fact, home insurance also includes protection for many damages to the house or personal property caused by other reasons, as well as protection for the owner when an accident occurs indoors or outdoors by guests or others passing by. A correct understanding of homeowners insurance and right insurance will protect your property well and reduce property losses caused by disasters.
Homeowners should purchase home insurance to ensure that economic losses can be compensated in the event of an accident or sudden disaster. All lenders also require a home insurance clause to be added to the policy.
Please see the following different home insurance forms, the following “HO” is the abbreviation of Home Owner.
HO-1 Basic (Basic): Indemnity for damage to the house due to Fire of Lightning, Windstorm or Hail, Explosion, Riot or Civil Commotion, Aircraft, Vehicles, Smoke, Vandalism or Malicious, Volcanic Eruption, Burglary Damages and Theft. It also cover liability and medical payment for injured guests and damaged property due to homeowner’s negligence.
HO-2 Expansion Insurance (Broad): Includes all of the above HO-1 perils plus Falling Objects, Collapse, Weight of Ice, Snow or Sleet, Accidental Discharge of Steam or Water System, Cracking, Burning, Tearing Apart of Steam or Water System, Freezing of Plumbing, Heating, A/C System and Damage of Appliance Caused by Sudden Surge of Power. It also cover liability and medical payment for injured guests and damaged property due to homeowner’s negligence.
HO-3 All Risk: Cover all perils except those excluded from the policy. Excluded coverage are Earthquake, War, Nuclear, Flood, and Etc. Please refer to the actual policy for complete exclusions. It also cover liability and medical payment for injured guests and damaged property due to homeowner’s negligence.
HO-5 Comprehensive Insurance (Comprehensive): It covers ever broader cover of HO-3, mostly used in luxury home insurance.
HO-4 Renter’s Insurance: All Risk coverage, it protect tenant’s personal property and liability.
HO-6 Condominium Coverage: Also known as Unit Owner policy, this insurance is designed to protect Condo and Coop unit owner’s personal property and liability. Homeowners must read the condo bylaws carefully to determine the amount of insurance that must be purchased.
HO-7 Mobile Home Insurance: For mobile home owners.
HO-8 Older Home Insurance: This is meant for older homes with a market price below the cost of rebuilding. Homeowners can insure at market rates below the rebuild price.
There is also a Dwelling Fire form insurance, which covers basic owner occupied and tenant occupied non-commercial 1-4 family home.
Typical Home Insurance Coverages
Section I — Property Coverages
Coverage A – Dwelling
Covers the value of the dwelling itself (not including the land). It cover the replacement cost of the building up to the policy limits.
Coverage B – Other Structures
Covers structure that is on the lot but not attached to the main building. Typically limited at 10% to 20% of the Coverage A, with additional amounts available by endorsement.
Coverage C – Personal Property
Covers personal property, with limits for the theft and loss of particular classes of items (e.g., $200 for money, banknotes, bullion, coins, medals, etc.). Typically 50 to 70% of coverage A is required for contents, which means that consumers may pay for much more insurance than necessary.
Coverage D – Loss of Use/Additional Living Expenses
Covers expenses associated with additional living expenses (i.e. rental expenses) and fair rental value, if part of the residence was rented, however only the rental income for the actual rent of the space not services provided such as utilities.
Covers a variety of expenses such as debris removal, reasonable repairs, damage to trees and shrubs for certain named perils (excluding the most common causes of damage, wind and ice), fire department changes, removal of property, credit card / identity theft charges, loss assessment, collapse, landlord’s furnishing, and some building additions. These vary depending upon the form.
Section II — Liability Coverages
Coverage E – Personal Liability
It cover liability and medical payment for guests got hurt and other people’s property got damaged due to homeowner’s negligence.