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All About Homeowner's Insurance

Levels of Protection

In the Nick of Time

Many homeowner's policies cover damage that ranges above and beyond the 17 disasters listed here. In fact, most cover damage from just about anything unless it's specifically excluded. Because of this, it's important to know what your policy does and doesn't cover.

Which policies cover what? Here's a rundown on the most commonly offered policies, and the protection they provide:

  • HO-1 covers only the first 11 disasters on the previous list. This bare-bones option is no longer available in most states.

  • HO-2 provides basic protection against all 17 disasters.

  • HO-3 takes HO-2 up a notch. It covers houses and other structures for all perils — including the named disasters above. The only exceptions are perils that the policy specifically excludes — typically earthquakes and floods.

  • HO-4 is for renters. It protects personal belongings and any part of the dwelling that you own — say, for example, you had bookcases built in the den of your apartment — against all 17 disasters.

  • HO-6 covers people who live in condominiums or co-ops. Like HO-4 policies, it covers belongings and structural elements inside the dwelling.

  • HO-8 is a special policy that's designed for older homes. Since older homes typically contain more costly materials and construction methods, these policies reimburse for damage on an actual cash value basis — replacement cost less depreciation.

For homeowners, HO-3 is the most popular and the one most commonly written. Not only does it provide better coverage than HO-2 does, it usually costs only a bit more.

Homeowner's Insurance, Texas Style

Things are a little different in Texas when it comes to homeowner's insurance. There,the State Insurance Board permits the sale of the following policy forms:

  • HO-A, which provides limited actual cash value coverage for only the types of damage specifically listed in the policy.

  • HO-A amended policies. These provide more-extensive coverage than HO-A policies but less coverage than the next level.

  • HO-B, which covers a home for all perils (unless excluded) against all risks. It also covers contents against named perils. This policy covers replacement cost up to the policy limit on a house; its contents are covered for actual cash value unless additional replacement cost coverage is purchased.

  • HO-C, which provides house and contents coverage for all risks not specifically excluded by the policy. Again, the dwelling is insured for replacement cost up to the policy limit; contents are covered for actual cash value unless additional coverage is purchased.

Policies are also available for renters and people who own condominiums, town-homes, mobile homes, and so on.

HO-A, HO-B, and HO-C are all standardized policies. They must be worded exactly the same and offer the same coverage regardless of who offers them. HO-A amended policies are not standardized. Companies can also offer alternatives to the policies listed here if they're approved in advance by the commissioner of insurance. These policies also are not standardized.


Excerpted from The Complete Idiot's Guide to Common Household Disasters © 2005 by Paul Hayman and Sonia Weiss. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.

To order this book visit Amazon's web site or call 1-800-253-6476.

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