Homeowner Policy Coverage Format
The policy of choice for those who own homes is the Homeowners Insurance Policy. We must distinguish, however, between owner occupied homes and those occupied by tenants and occupants other than the owner of the property. When the home is not owner occupied the appropriate form of coverage is a dwelling owner policy or a landlord policy. I cover information for landlord policies and dwelling owner policies in a separate place on this website but it is generally true that much of the descriptions for the coverage of a homeowner policy will apply to some of the coverage in dwelling owner policies. There are important differences so they are handled separately. Another point that should be explained here is that a tenant living in a rented house buys a form of homeowner coverage called the Tenant Policy. A Tenant Policy is not sold to owners of rented dwellings. A Tenant Policy is also referred to as an HO-4 policy. When you see the coverage described as a “Tenant Policy” it is referring to a non-owner occupant of a rental structure, whether a single family dwelling or an apartment building, and even though the tenant does not “own” the building, we provide coverage for tenants under homeowner policies as HO=4 coverage.
There used to be seven different homeowner policy forms (forms of coverage). They were described as HO-1, HO-2, HO-3, HO-4, HO-5, HO-6 and HO-8 type policies. I will briefly describe each. The HO-1 Basic homeowner policy is no longer generally available. Before I start that task I also want to refer to the basics of constructing property coverage for a homeowner form, First there is the types of property we basically include coverage for in every form of the homeowner policy. Secondly, we should understand the types of perils or causes of loss that are provided by each policy type. We should also understand the basic structure of the policy that is true for homeowner policies and how we value property at the time of loss.
Basic Policy Construction and Coverage Format
The homeowner policy has a similar structure regardless of whether or not it is a HO-2 or an HO-8. The HO-4 Tenant Homeowner and HO-6 Condo Owner policy forms do have notable exceptions and I will cover that here. The following basic policy format exists for all owner occupied policies:
Section 1 – Property Coverages
Coverage A – Dwelling at 100% of Replacement Cost
Coverage B – Other Structures – Coverage is 10% of Coverage “A “Automatically
Coverage C – Personal Property – Automatic Coverage is 50% or 55% of Coverage “A” Amount
Coverage D – Loss of Use – Varies from 20% to the Actual Loss Sustained for 12 months after a loss
Section 2 – Liability Coverages
Coverage E – Personal Liability – Minimum of $100,000 up to $1,000,000 depending on carrier
Coverage F – Guest Medical Payments – Minimum of $1,000 up to $10,000 depending upon the carrier
Almost all homeowner policies have a minimum $1,000 deductible today. There are of course a number of policy endorsements and amendments that can be made and coverage “B”, “C”, “D”, “E”, and “F” can all be amended to higher limits. Those that are showing are the limits provided in the basic policy format.
On coverage “C” (contents) for example, if you purchase the replacement cost endorsement for personal property then those limits are amended to 70% or 75% of coverage “A”. This should give you a good idea of what to expect.
If you want more personal attention for your unique questions contact Terry McCarthy at (513) 779-7920 Monday – Friday from 9 – 5 most days for time or you can reserve time at most every other time by scheduling the time in advance.
