Not All Home Insurance Policies Are Created Equal -

Details for Not All Home Insurance Policies Are Created Equal

ID:	4899
Author:	lincolns
Title:	Not All Home Insurance Policies Are Created Equal
Article:	One of the most common misunderstandings among homeowners is that all home policies are created equal. There are actually five different classes of home insurance policy you can purchase. The range of coverage for each class varies greatly depending on which one you buy. The five most common home policies available throughout the United States are the HO1, HO8, HO2, HO3 and HO5. In addition to the five homeowner policies, policies for condo owners (HO6) and renters (HO4) are also discussed here. Before we get into the details about each different policy, we need to understand the difference between an Open Perils policy and a Named Perils policy. An Open Perils policy will protect your home (and possibly your personal property) from anything that happens to it, with a few specific exclusions. Those exclusions are listed later in the article. There are only two policies that are open perils; the HO3 and the HO5. A Named Perils policy specifically lists the perils or disasters that your home and property are protected from. If something happens to your home that is not found on the list, you are not covered. The HO1, HO8, HO2, HO6, and HO4 are all Named Peril policies. HO1: Basic Named Perils Policy The HO1 Home Policy is the most basic and simple protection you can have. This policy will only protect you from 10 specific perils. If something happens to your home other than these ten perils, you are not covered. The ten perils are: 1. Fire or Lightning 2. Windstorm or Hail 3. Explosion 4. Riot or Civil Commotion 5. Aircraft 6. Vehicles (unless caused by the insured) 7. Smoke 8. Vandalism or Malicious Mischief 9. Theft (limit of liability on HO8 is usually $1,000) 10. Volcanic Eruption HO8: Basic Market Value Policy The HO8 Policy is the most basic and simple protection you can have. This policy will only protect you from the same 10 perils listed above in the HO1 policy. The only real difference between the HO1 and the HO8 is that the HO8 policy will cover your home for market value rather than the cost to replace it. Instead of being a replacement cost policy, most HO8 policies are actual cash value. HO2: Broad Named Perils Policy The HO2 Home Policy provides broader coverage than the HO1 policy. It still explicitly lists every peril you are protected from, but the list adds six more perils. This protection covers your dwelling and your personal property. The sixteen perils are: 1. Fire or Lightning 2. Windstorm or Hail 3. Explosion 4. Riot or Civil Commotion 5. Aircraft 6. Vehicles 7. Smoke 8. Vandalism or Malicious Mischief 9. Theft 10. Volcanic Eruption 11. Falling Objects 12. Weight of Ice, Snow, or Sleet 13. Accidental Discharge or Overflow of Water or Stream 14. Sudden Accidental Tearing Apart, Cracking, Burning, or Bulging 15. Freezing 16. Sudden Accidental Damage from Artificially Generated Electric Current HO3: Basic Open Perils Policy The HO3 Home Policy is a hybrid of an open perils policy and a named perils policy. This is the most common type of home insurance policy. This policy covers your dwelling for anything and everything that could possibly happen to it other than explicitly excluded events, while your contents are covered for the sixteen perils covered in the HO2 policy. The exclusions to the dwelling protection are listed below. 1. Earth Movement 2. Ordinance or Law (some coverage may be provided in your policy) 3. Water Damage (some coverage may be provided in your policy) 4. Power Failure 5. Neglect 6. War 7. Nuclear Hazard 8. Intentional Loss 9. Government Action 10. Mechanical Breakdown 11. Collapse (some coverage may be provided in your policy) 12. Mold, Fungus, or Wet Rot (some coverage may be provided in your policy) 13. Smog, rust, corrosion 14. Smoke from Agricultural Smudging Industrial Operations 15. Dispersal, Discharge, Seepage of Pollutants 16. Animals owned by Insured 17. Birds, Vermin, Rodents, Insects 18. Wear Tear, Deterioration 19. Settling, Shrinking, Bulging, or Expanding (of bulkheads, foundations, pavement, patios, footings, floors, roofs, ceilings) If something happens to your home that is not specifically listed as one of the above exclusions, it is covered under the HO3 policy. HO5: Full Open Perils Policy The HO5 Home Policy is full open perils on both your dwelling and personal property. The main difference between the HO3 and the HO5 is that unlike the HO3, the HO5 covers your personal property for open perils. The HO5 is the most extensive insurance coverage most homeowners can purchase. The same exclusions in the HO3 policy are found in the HO5 policy. HO4: Renters Policy The HO4 policy is very different from the rest of the policy types, because there is NO coverage for the Dwelling, Other Structures, or Loss of Use. This policy was designed for those who are renting and have no interest in the existing structure, but want to make certain their belongings are protected. The HO4 Policy comes with the amount of Personal Property, Liability, and Medical Payments to Others that you specify. Renter Policies are named peril policies. Your contents are protected from the same 16 named perils that are covered in the HO2 policy. They are listed again below for convenience. 1. Fire or Lightning 2. Windstorm or Hail 3. Explosion 4. Riot or Civil Commotion 5. Aircraft 6. Vehicles 7. Smoke 8. Vandalism or Malicious Mischief 9. Theft 10. Volcanic Eruption 11. Falling Objects 12. Weight of Ice, Snow, or Sleet 13. Accidental Discharge or Overflow of Water or Stream 14. Sudden Accidental Tearing Apart, Cracking, Burning, or Bulging 15. Freezing 16. Sudden Accidental Damage from Artificially Generated Electric Current HO6: Condo Policy The HO6 policy is very unique. Most condo owners are not responsible for any exterior loss that might occur, but they are responsible for the interior walls, floors, and ceilings of their condo, as well as their personal property. Because a condo owners responsibility to repair the entire interior in the event of a loss, HO6 policies must have dwelling coverage. Because condo owners are indeed owners, HO6 policies also have loss of use coverage. The primary difference between a regular homeowners policy and the HO6 policy is that condo policies do not have other structures coverage. They also typically have a very low coverage amount for the dwelling, because they are not responsible for the entire structure. Condo policies are named peril policies and are protected from the same 16 perils that apply with the HO2 and the HO4 Policies. About the author of this article: lincoln stevens is marketing director of insurance education group , an education-based site designed to help you better understand your insurance coverage and shop for better rates. do you have questions about insurance? take a few minutes to browse our site to learn, shop insurance rates, and save.
Category:	Home
Date:	October 26, 2009 12:03:13 AM

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