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Homeowners

The homeowners policy provides protection against the financial consequences of personal losses. A homeowners policy is a combination of property and liability coverages. The homeowners policy is tailored to meet the needs of a homeowner. The following is a basic outline of the homeowners (HO-3) policy and the endorsements most widely used on the HO-3 policy. The HO-3 policy provides coverages for one or two family dwellings that are owner occupied. The HO-3 policy provides coverage against risks of direct physical loss to real property, except for those causes of loss that are specifically excluded. Personal property is covered against direct physical loss caused by a specified peril. In addition to the coverages stated under Section I, several additional coverages are included. Some of the coverages included are; debris removal, fire department charges, reasonable repairs charges, property removal charges, and coverage for trees, shrubs and plants. Coverage is also included for loss involving credit cards, forgery, and counterfeit money. These additional coverages are included to provide protection for the insured following a covered property loss. Each additional coverage has limitations and is subject to certain conditions.

Dwelling
This amount of insurance applies to the dwelling and attached structures. The limit of insurance for the dwelling is based on the value of the home and what it would cost to replace the home.

Other Structures
This coverage limit applies to detached structures such as a garage or storage shed. The limit of coverage is set at 10% of the dwelling. The insured can purchase a higher limit.

Personal Property
Coverage C provides worldwide coverage for personal property of the insured. Special limits apply to some types of property, and some property is excluded from coverage. The overall limit for coverage C is 50% of the dwelling limit. Coverage C can be modified in several ways with endorsements.

Loss of Use
This coverage applies in the event of a loss under Coverage A. If the insured was to temporarily lose use of the dwelling this coverage would apply. Payment would be made for expenses incurred to live elsewhere following a loss that makes the home unsuitable for living. Another method used to determine payment for loss of use is fair rental value, which is the amount of rent that could reasonably be charged for the premises, less any expenses that do not continue while the premises are unsuitable for living.

Personal Liability
Section II of the homeowners policy provides liability coverage for personal loss exposures. The insuring agreement under Coverage E provides liability coverage if a claim is made or suit is brought against an insured because of bodily injury or property damage. Coverage is provided for the residence premise as well as any other premises used by the insured, as a residence, permanently or temporarily. Liability coverage is provided for the named insured and members of the named insured's household who are relatives. Personal liability has a basic limit of $100,000 per occurrence, which the insured may increase for an additional premium. In addition to the basic limit, Coverage E also provides additional coverages for expenses such as defense cost, expenses incurred providing first aid to others, damage to property of others and loss assessment charges. The additional coverages provided under Section E are subject to limitations and certain conditions.

Medical Payments
This coverage will pay the necessary medical expenses for bodily injury of others. Coverage applies to accidents that occur on the insured premises or any location when caused by action of the insured. The coverage has a basic limit of $1,000 per person. The insured may select higher limits.


Endorsements

  • Inflation Guard Endorsement
    When this endorsement is added to the policy, it increases the limit of coverage for A, B, C, and D. The insured selects the percentage of increase for the year and the limits are automatically increased at certain dates throughout the year.
  • Earthquake Coverage Endorsement
    Earthquake coverage is excluded under Section I of a homeowners policy. Adding this endorsement removes the exclusion and adds earthquake coverage which is subject to a deductible for each coverage under Section I.
  • Increase Other Structures Limit
    This endorsement increases the limit under coverage B, Other Structures. The limit for unattached structures on the residence premise would be increased, and the increase would be in addition to the limit already provided.
  • Increase Special Limits
    Certain types of personal property under Coverage C have special limits of liability. Adding this endorsement increases the limit for those particular types of property.
  • Scheduled Personal Property
    The scheduled personal property endorsement is used to provide coverage for risk of direct loss for such items as jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, postage stamps and rare coins. Scheduled property can be insured for any amount the insured requires.
  • Personal Property Replacement Cost
    Property loss settlements under the homeowners policy are made on an actual cash value basis. When the replacement cost endorsement is added, the loss settlement payment would be sufficient to replace the item for the cost at the time of loss without deductions for depreciation


Condo Coverage

The H0-6 policy is a special form of homeowners insurance that was designed to meet the unique insurance requirements of owners of condominium units and cooperative apartments. An insured can only qualify for an H0-6 policy by being an owner occupant of a residential condominium unit or a cooperative apartment. The insured premises is defined as the unit where the insured resides, an H0-6 policy can not be used to insure a unit owned by the insured but rented or leased to others. The condominium unit is defined as the space between the walls, ceiling and floor. Sometimes unit owners are responsible for parts of the unit beyond the walls, ceiling and floor. Condominium unit owners also have an undivided interest with other unit owners in common areas of property. Common areas of property could include the land, stairways, halls, parking and storage areas, and the heating and cooling system. The unit owner's responsibilities are usually outlined in the condominium agreement and bylaws. The major loss exposures for unit owners are loss to real property, loss to personal property, and legal liability. The following is a basic outline of the H0-6 policy and the endorsements most widely used on the H0-6 policy.

Dwelling
This coverage applies to the insured's real property, which is the unit. Coverage is provided on a named perils basis and is separated into four categories. The first category includes alterations, appliances, fixtures, and improvements that are part of the building and contained within the residence premises such as built-in appliances and cabinets, electrical fixtures, and similar items of this nature. The second category relates to items of real property that pertain exclusively to the residence premises, such as exterior glass or trees and shrubs that may be located on a patio that is part of the residence premises. The third category includes property that is the responsibility of the unit owner to insure under an agreement of a corporation or association of property owners. Insurance for this category of property provides coverage for any portion of the common areas of the building that the association agreement states is the insurance responsibility of the unit owner. The final category of property relates to structures owned solely by the insured at the location of the residence premises but are not a part of the residence premises. This category could include a private garage that was not attached to the residence premises but located elsewhere in the condominium complex. The basic limit of liability under coverage A is $1,000, which can be increased if necessary. If the association or cooperative insurance policy is written on a bare walls basis, then the unit owner would have to provide coverage for the entire interior of the unit. It is important for the unit owner to review the condominium or cooperative association's coverage to determine if the basic limit for Coverage A of the H0-6 policy is adequate.

Personal Property
This coverage limit applies to the personal property of the unit owner. The limit of insurance is selected by the unit owner. The unit owner's personal property may include such items as furniture, clothing, television and stereo equipment, books, records compact discs and tapes. It could also include any items not considered part of the building structure. Items such as carpeting, if placed over finished flooring, would be considered personal property, but carpeting placed wall to wall over a rough subfloor or concrete slab is usually considered part of the building.

Loss of Use
This coverage is provided if a loss is caused by an insured peril to covered property or to the building containing the property, if it makes the residence premises unfit to live in. The limit of insurance is 40 percent of Coverage C limit.

Personal Liability
This provides coverage if a claim is made or suit is brought against the insured because of bodily injury or property damage caused by a covered occurrence. Personal liability has a basic limit of $100,000 per occurrence, which can be increased for an additional premium.

Medical Payments
This coverage will pay the necessary medical expenses that are incurred or medically ascertained within three years from the date of an accident causing bodily injury to someone other than an insured. Coverage applies to accidents that occur on the insured premises, or any location, when caused by action of the insured.


Endorsements The following endorsements relate specifically to the HO-6 policy.

  • Unit Owners: Special Coverages (A)
    This endorsement can be used to change Coverage A of the HO-6 to provide coverage for risk of direct loss. When this endorsement is used, all direct loss to real property, which is the unit, is covered unless specifically excluded.
  • Unit Owners: Rental to Others
    This endorsement provides property and liability coverage for the unit owner while the residence premises is regularly rented or held for rental to others. Theft coverage is provided for personal property at a rented condominium, however, high value items are not covered. Coverage for medical payments are also included.
  • Loss Assessment Coverage
    This endorsement increases the limit of liability for the loss assessment coverage provided in the policy.
  • Loss Assessment Coverage for Earthquake
    This endorsement provides coverage for loss assessment made against the unit owner by a corporation or association of property owners due to the peril of earthquake.
  • Unit Owners: Special Coverage (C)
    The H0-6 provides coverage on a named-peril basis, when this endorsement is added, Coverage C is changed to provide coverage for all direct loss to personal property unless specifically excluded.


Renters Coverage

The HO-4 renters policy is a combination of property and liability coverages. The HO-4 policy is tailored to meet the needs of a tenant. The following is a basic outline of the HO-4 Renters Policy and the endorsements most widely used on the HO-4 policy. The HO-4 policy provides coverage for a tenant of a single family residence or a tenant of an apartment. The policy focuses on loss to personal property and loss to additions. Coverage for legal liability is also included. The HO-4 policy does not include coverage for the dwelling and other structures because a tenant does not have an insurable interest in the building. However, the HO-4 policy provides coverage for building additions and alterations made by the tenant. Personal Property is covered against direct physical loss caused by a specified peril. In addition to the coverages provided under Section I of the policy, additional coverages are included for debris removal, fire department service charges, loss assessment charges, reasonable repair charges, and property removal charges. Payment is also made for loss involving credit cards, forgery, and counterfeit money. The additional coverages are included to provide additional protection in the event of certain peril losses. All additional coverages are subject to certain limitations and conditions.

Personal Property
This is the primary limit of insurance coverage for the H0-4 policy. Coverage C provides worldwide coverage for personal property of the insured. Special limits apply to some types of property, and some types of property are excluded from coverage. The insured selects the limit of coverage which is determined by the value of personal property owned.

Loss of Use
Coverage D applies if a peril insured against under Coverage C makes the residence unsuitable for living. Payment would be made for expenses incurred to live elsewhere following the loss. The limit for Coverage D is 20% of Coverage C.

Personal Liability
Section II of the renters policy provides liability coverage for personal loss exposures. The insuring agreement under Coverage E provides liability coverage if a claim is made or suit is brought against an insured because of bodily injury or property damage. Coverage is provided for the named insured and members of the insured's household who are relatives. Personal Liability has a basic limit of $100,000 per occurrence. The insured may increase this limit for an additional premium. In addition to the basic limit, Coverage E also provides additional coverage for expenses such as defense cost, expenses incurred providing first aid to others, damage to property of others and loss assessment charges.

Medical Payments
This coverage will pay the necessary medical expense for bodily injury of others. Coverage applies to accidents that occur on the insured premises or any location when caused by action of the insured. This coverage has a basic limit of $1,000 per person. The insured may select higher limits for an additional premium.


Endorsements

  • Inflation Guard Endorsement
    When this endorsement is added to the policy it increases the limit of Coverage C and D. The insured selects the percentage of increase for the year and limits are automatically increased at certain dates throughout the year.
  • Earthquake Coverage Endorsement
    Earthquake coverage is excluded under Section I of the policy. Adding this endorsement removes the exclusion and adds earthquake coverage which is subject to a deductible for each coverage under Section I
  • Scheduled Personal Property
    The scheduled personal property endorsement is used to provide coverage for risk of direct loss for such items as jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, postage stamps and rare coins. Scheduled property can be insured for any amount the insured requires.
  • Increase Special Limits
    Certain types of personal property under Coverage C has special limits of liability. Adding this endorsement increases the special limit
  • Building Additions/Alterations
    The policy provides additional coverage for building improvements or installations, made or acquired at the tenants expense. The basic limit is 10% of Coverage C limit, adding this endorsement increases the basic limit.
  • Water Bed Liability
    This endorsement provides coverage for liability arising out of an insured's ownership or use of a water bed on the residence premises
  • Deductible
    The renter's policy has a standard deductible of $250. The insured may reduce the deductible to $100 or increase it to $500, $1,000 or $2,500.


Valuable Articles

"Scheduled Personal Property " - Insures for the loss, misplacement or theft of certain personal belongs such as jewelry, furs, silverware, fine art cameras, musical instruments, gold equipment, coins and stamps for a scheduled amount not subject to a deductible. Although scheduling property is more expensive than buying increased limits coverage, in the example of jewelry, it does not subject you to a $1,000 limit per item or a deductible. It also covers, in addition to theft, the misplacement of jewelry or the accidental loss of a stone from a jewelry setting.