what does homeowners insurance cover?

Homeowners insurance is a benefit plan merging two or more different contracts into one policy. Until homeowners were covered in the 1950s, land insurance on private residences and personal property, burglary coverage, and personal liability insurance could not be obtained in one scheme. The new homeowners (HO) format combines standard fire policy with other coverage, including comprehensive personal liability insurance, extra living expense coverage, housing replacement-cost coverage, and medical costs for individuals other than homeowner and relatives.

The Insurance Services Office (ISO) made a significant revision of HO insurance policy terminology in 1976. Homeowners 76 Policy called the policyholder "you" and the insurer "we." The traditional fire policy was abolished as a separate text, integrating its introductory provisions into the homeowner policy itself.

HOMEOWNERS PROGRAM 1984

The Homeowners 76 Program was not implemented in many states, instead of using the older forms. Eliminating the standard fire policy as a separate document in some states created issues as legislation required standard fire policy. The ISO revised the homeowner's policy in 1982 and was initially implemented on a trial basis in six states in 1982, and the new HO types were introduced in 1984.

A homeowner contract may only be written on an owner-occupied dwelling that includes no more than two families (four in some states).

POLICIES OF HOMEOWNERS

HO-1 (Basic Form)

HO-1 insures the dwelling and other buildings and protects the personal property of the insured. Homeowner's 1 strategy is named-perils. Homeowners 1 is still not commonly used and has been discontinued in several nations.

HO-2 (Broad Form)

HO-2 extends coverage under the basic form, introducing additional risks.

HO-3 (Special Form)

HO-3 insures the dwelling and other buildings against the risks of direct physical damage to land, excluding explicitly excluded damages. Personal property is protected by the same large named hazards described in HO-2, plus the danger of glass or protection glazing material that is part of a house, storm door, or storm window.

HO-4 (Contents Broad Form)

HO-4 is built explicitly for location tenants. Homeowner 4 protects the tenant's personal property against loss or injury and offers personal liability insurance.

HO-6 (Unit-owners Form)

HO-6 is for condominium and cooperative apartment owners. Homeowners 6 protect the insured's personal property for the same-named Homeowners 2 risks.

The condominium unit also has a minimum premium of $1000 covering the following property:

Changes, appliances, fixtures, and upgrades are part of the residence premises, such as appliances, carpets, extra kitchen cabinets, and wallpaper.
Actual property pertains solely to residence premises, such as patio or balcony, or patio trees or shrubs.
Property that could be the insured's responsibility under the condominium owners' agreement, such as fixtures or interior partitions.
Structures owned exclusively by the insured, other than the condominium unit at the condominium site, such as a private garage or fence.

HO-8 (Modified Coverage Form)

HO-8 is a modified version of HO-1 paying losses to residences and other buildings depending on the amount needed to fix or rebuild the property using standard building materials and methods. Payment is not expense replacement. Moreover, theft coverage is limited to damages on residence premises up to a maximum of $1000 per incident.

The HO-8 is built for older homes in urban communities where a house's replacement cost can significantly exceed its market value.

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Home insurance policy layout

Declarations

The front-page of the HO shows descriptive materials called statements from insurance applications. Declarations display the insurer's ranking details for determining the rate. The insured's name and address appear—shows when the policy starts and ends. And the insurance company's overall liability limits for the different coverage are entered, usually in boxes next to the various coverage's.

Insurers' liability cap is split into two parts. Section 1 offers property insurance coverage and is divided into four coverage (or insurance agreements), each with a different liability cap. Section 2 protects responsibility and is split into two covers.

Homeowner's coverage is to handle each coverage (A through F) separately. Dollars cannot be transferred among different coverage. The maximum amount the insured will collect is the total of all coverage.

Coverage A, the insured's residence. Coverage B refers to an unattached garage or shed. Coverage C refers to properties typically found in homes such as furniture, clothing, appliances, and other personal property. Coverage D, loss

A usage incurs extra costs if the covered loss keeps the insured from staying at home.

As a percentage of coverage A, the various insurance agreements' liability limits are contained in Section 1. If the insured opts for coverage A, coverage B will automatically equal 10 percent of that amount. Coverage C equals 50% A coverage. Coverage D is 20% of coverage A. If an insured requires additional insurance, B, C, or D coverage can increase. Coverage cannot be decreased below percentages. Insured would pay extra fees for expanded coverage. Section 2 covers responsibility and is split into two coverages. Coverage E defends against adverse legal decisions. Coverage F makes compensation payments to people injured by injury arising from the insured's property or activities. Coverage is possible without defining the legal responsibility of the homeowner.

Definitions

After the insurance agreement, a brief glossary specifies the definition of eight essential words found in boldface form in the contract.

Physical injury includes bodily harm, illness, or disease, including needed treatment, loss of services, and the resulting death;

• Business has business, career or occupation;

* Insured means you and your household residents:

a. Your parents

b. Other persons under the age of 21 and any person mentioned above

Section 11 also means:

c. For animals or watercraft to which this policy refers, any individual or agency legally responsible for these animals or watercraft owned by you or any person included in or above. An individual or organization that uses or manages these animals or watercraft during business or without the owner's consent is not an insured

d. Whatever vehicle this policy applies to:

1. Persons engaged in your job or any person included in the above; or

2. Other individuals using the insured vehicle with your permission means:

Insured Location:

a. The house is situated

b. Other buildings, other facilities and grounds that you used as a home and:

1. What's shown in Declarations;

2. Or acquired during the policy era for your use as a residence;

c. Any premises you use in conjunction with the premises above;

d. Part of the premises:

d. Vacant land, other than land owned or leased to an insured;

e. Land owned or rented to an insured on which one or two-family homes are being built for and insured;

f. Person or family cemetery plots or insured burial vaults;

g. Any part of the premises sometimes leased to an insured for non-business use;

Occurrence means an accident, including exposure to conditions, resulting in:

a. Bodily injury;

b. Harm to land.

Property damage includes physical harm, degradation, or loss of tangible property

Employee residency means:

a. An employee of a person whose duties relate to the maintenance or use of household or domestic services;

b. One who performs similar duties outside the insured's company

Residence premises:

a. The one family, other structures and grounds

b. That part of every other building; where you live, displaying the 'residence premises' as in the declarations

Residence premises also means a two-family home where you live in at least one of the family units shown in the declarations as to the "residence premises."

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ANALYSIS OF HOMEOWNERS (HO-2) POLICY

SECTION 1 - PROPERTY COVERAGE

Section 1 of the HO consists of four parts. They are labeled A through D and "Additional Coverages." Section 1 informs the insured what property and other losses are covered and what losses are not covered.

Coverage A applies to the insured's residence premises shown on the Declarations. A second home or summer cottage, which might be considered a temporary residence, is not covered since it does not appear in the Declarations.
Coverage B applies to other structures on the residence premises separated from the home by a clear space. An unattached garage or tools shed are examples of property covered in this section.
Coverage C applies to the personal property of the insured located anywhere in the world. Particular limits on personal property are detailed in the policy.

Sometimes the question is raised whether a specific item is a real or personal property. If it is real property, it would be covered under Coverage A; if it is personal, it would be covered under Coverage C. The English common law rule is land and anything permanently attached to land is real property

The Special Limits of Liability passage establishes maximum dollar amounts that can be recovered when the specifically identified property is lost. In some cases, the limits apply only to loss by the peril or theft; in other cases, any loss is subject to the specified limits.

Special limits of liability. These limits do not increase the Coverage C limit of liability. The particular limit for each numbered category below is the total limit for each loss for all property in that category:

$200 for banknotes, bullion, gold other than gold, silver other than silverware, platinum, coins, and medals.
$1000 on shares, accounts, debt, credit letters, documents, notes, manuscripts, passports, tickets, and stamps.
$1 000 for watercraft, including trailers, machinery, and outboard motors.
$1000 on non-watercraft trailers.
$1000 Gravemarkers.
$1000 for theft of jewelry, watches, furs, semi-precious stones.
$2000 Gun theft loss.
$2500 for theft of silverware, silver-plated glass, gold-plated ware, and pewter-ware. This includes flatware, hollowware, tea sets, trays, and silver, gold, or pewter trophies.
$2500 on land, on-premises used at any time or for any reason.
$250 on land, not used at any time or for any business purpose.

Some assets are exempt from coverage, including:

Personal property insured elsewhere, such as in a floater.
Animals, birds, fish.
Vehicles and supplies.
Property associated with renting an apartment was historically called "Additional Living Expense." The former term appears more descriptive, as R stresses that insurance only covers the requisite increase in living expenses. Fix or repair harm for the shortest time.

Other coverage:

Debris removal cost is covered.
Expenses incurred to protect property are protected.
Restricted coverage is sometimes available when there is damage to trees and shrubs.
Fire service costs are reimbursed.
Property removed from residence as it was threatened and subsequently destroyed or stolen at removal site is protected.
Credit card fraud and related frauds cover a small sum.
Some damage assessments in cooperative buildings are charged up to $1,000.

Collapse.

The collapse was a called threat in previous iterations of HO insurance policy. Special care is now given. A collapse is hard to describe since it can result from several different causes. Also, some courts have adopted this rule's doctrine. When a loss occurs from two separately identifiable risks, one protected (for example, negligence or collapse) and one excluded (for investigation pie, underground water pressure), the HO would give coverage. Concurrent causation court rulings have resulted in the intentional treatment of collapse-related damages as additional coverage rather than as a peril.

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