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Yes. A person who owns his or her home would have
a different policy from someone who rents. Policies also differ on the
amount of insurance coverage provided.
The different types of homeowners policies are fairly standard
throughout the country. However, individual states and companies may
offer policies that are slightly different or go by other names such as
“standard” or “deluxe”. The one exception is the state of Texas, where
policies vary somewhat from policies in other states. The Texas
Insurance Department (
http://www.tdi.state.tx.us ) has detailed information on its various
homeowners policies.
The chart below lists the disasters covered in each of the following
types of policies:
|
Dwelling & personal property |
Dwelling
|
Personal
property
|
Dwelling & personal property |
|
Perils |
Basic HO-1*+ |
Broad HO-2* |
Special HO-3* |
Special HO-3 |
Renters HO-4 |
Condo/
Co-op HO-6 |
Modified Coverage HO-8 |
| 1. Fire or
lightning |
x |
x |
x |
x |
x |
x |
x |
| 2. Windstorm or hail |
x |
x |
x |
x |
x |
x |
x |
| 3.
Explosion |
x |
x |
x |
x |
x |
x |
x |
| 4. Riot or civil commotion |
x |
x |
x |
x |
x |
x |
x |
| 5. Damage
caused by aircraft |
x |
x |
x |
x |
x |
x |
x |
| 6. Damage caused by vehicles |
x |
x |
x |
x |
x |
x |
x |
| 7. Smoke |
x |
x |
x |
x |
x |
x |
x |
| 8. Vandalism or malicious
mischief |
x |
x |
x |
x |
x |
x |
x |
| 9. Theft |
x |
x |
x |
x |
x |
x |
x |
| 10. Volcanic eruption |
x |
x |
x |
x |
x |
x |
x |
| 11.
Falling object |
|
x |
x |
x |
x |
x |
|
| 12. Weight of ice, snow or
sleet |
|
x |
x |
x |
x |
x |
|
| 13.
Accidental discharge or overflow of water or steam from within a
plumbing, heating, air conditioning, or automatic
fire-protective sprinkler system, or from a household appliance. |
|
x |
x |
x |
x |
x |
|
| 14. Sudden and accidental
tearing apart, cracking, burning, or bulging of a steam or hot
water heating system, an air conditioning or automatic
fire-protective system. |
|
x |
x |
x |
x |
x |
|
|
15. Freezing of a plumbing, heating, air conditioning or
automatic, fire-protective sprinkler system, or of a household
appliance. |
|
x |
x |
x |
x |
x |
|
| 16. Sudden and accidental
damage from artificially generated electrical current (does not
include loss to a tube, transistor or similar electronic
component) |
|
x |
x |
x |
x |
x |
|
| All perils
except flood, earthquake, war, nuclear accident, landslide,
mudslide, sinkhole and others specified in your policy. Check
your policy for a complete list of perils excluded. |
|
|
x |
|
|
|
|
|
* HO-1,
HO-2 and HO-3 refer to standard Homeowners Policies.
+HO-1
has been discontinued in most states. |
If
you own your home
If you own the home you live in, you have several policies to choose
from. The most popular policy is the HO-3, which provides the broadest
coverage. Owners of multi-family homes generally purchase an HO-3 with
an endorsement to cover the risks associated with having renters live in
their homes.
HO-1: Limited coverage policy
This “bare bones” policy covers you against the first 10 disasters. It's
no longer available in most states.
HO-2: Basic policy
A basic policy provides protection against all 16 disasters. There is a
version of HO-2 designed for mobile homes.
HO-3: The most popular policy
This “special” policy protects your home from all perils except those
specifically excluded. (Click on the link below for a sample HO-3 form;
you will need Acrobat which you can download, free of charge, from the
Adobe Web site:
http://www.adobe.com/products/acrobat/).
Download/View File:
HO-3 Form (160 K)
HO-8: Older
home
Designed for older homes, this policy usually reimburses you for damage
on an actual cash value basis which means replacement cost less
depreciation. Full replacement cost policies may not be available for
some older homes.
If you rent
your home
HO4-Renter
Created specifically for those who rent the home they live in, this
policy protects your possessions and any parts of the apartment that you
own, such as new kitchen cabinets you install, against all 16 disasters.
If you own a
co-op or a condo
H0-6: condo/co-op
A policy for those who own a condo or co-op, it provides coverage for
your belongings and the structural parts of the building that you own.
It protects you against all 16 disasters.
Your level of
coverage
Regardless of whether you are an owner or renter, you have the following
three options:
-
Actual cash value.
This type of policy pays to replace your home or possessions minus a
deduction for depreciation.
-
Replacement cost.
The policy pays the cost of rebuilding/repairing your home or
replacing your possessions without a deduction for depreciation.
-
Guaranteed or extended replacement cost.
This policy offers the highest level of protection. A guaranteed
replacement cost policy pays whatever it costs to rebuild your home
as it was before the fire or other disaster–even if it exceeds the
policy limit. This gives you protection against sudden increases in
construction costs due to a shortage of building materials after a
widespread disaster or other unexpected situations. It generally
won't cover the cost of upgrading the house to comply with current
building codes. You can, however, get an endorsement (or an addition
to) your policy called Ordinance or Law to help pay for these
additional costs. A guaranteed replacement cost policy may not be
available if you own an older home.
Some insurance companies offer an extended, rather than a guaranteed
replacement cost policy. An extended policy pays a certain
percentage over the limit to rebuild your home. Generally, it is 20
to 25 percent more than the limit of the policy. For example, if you
took out a policy for $100,000, you could get up to an extra $20,000
or $25,000 of coverage.
Even though a guaranteed/extended replacement cost policy may be a
bit more expensive, it offers the best financial protection against
disasters for your home. These coverages, however, may not be
available in all states or from all companies.
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