FacebookTwitterGoogle +Linkedin
715-598-9924

1Reason Insurance

Caring for Your Financial Well-Being

  • Questions & Answers
  • Contact
    • Blog
    • About
      • Partner Insurance Companies
  • Terms and Conditions
  • About
    • Meet Our Agents
    • Partner Insurance Companies
  • Personal Insurance
    • Auto Insurance
    • Boat Insurance
    • Home Owners Insurance
    • Life Insurance Quotes
    • Motorcycle Insurance
    • Personal Umbrella Insurance
    • Renters Insurance
    • RV Camper Insurance
    • Snowmobile Insurance
  • Business Insurance
    • Commercial Auto Insurance
    • What is General Liability Insurance
    • Health Insurance
    • Rental or Vacant Properties
    • Travel Insurance
    • Workers Compensation in Wisconsin
  • Blog
  • Contact
Home > Insurance Products > Home Owners Insurance

Home Owners Insurance


picture of family, including husband, wife, and girl sitting on grass in front of their home smiling.Homeowners insurance is a standardized package policy including property coverage for perils such as fire, wind or hail, vandalism and associated events such as loss of use of the home. Homeowners insurance also covers theft and the homeowner’s exposure to personal liability.

Homeowners coverage is considered a “package” because different lines of insurance are bundled into one policy.

The primary insurance coverages in the homeowners policy are divided into two general categories:

  • Section I—Property Damage
  • Section II—Liability

picture of family, including husband, wife, and girl sitting on grass in front of their home smiling.

A homeowners policy must have at least two parts:

  • Declarations page (or “dec”)
  • Policy form

The amounts of insurance provided to the insured are listed on the sample declarations page following the name and address of the insured. A separate limit of liability of insurance is shown for each of the coverages we mentioned earlier.

Although homeowners policies are standardized and pre-printed, they need to be flexible enough to meet a variety of requirements.

The ISO Homeowners Policy Program accomplishes this goal by offering six different versions of the policy form.

Standard Form Number Homeowner Insurance Form Name
HO 00 02 06 14 Homeowners 2 Broad Form

HO 00 03 06 14 Homeowners 3 Special Form

HO 00 04 06 14 Homeowners 4 Contents Broad Form

HO 00 05 06 14 Homeowners 5 Comprehensive Form

HO 00 06 06 14 Homeowners 6 Unit-Owners Form

HO 00 08 06 14 Homeowners 8 Modified Coverage Form

 

The current edition date of the homeowners forms is 06 14, but any time ISO makes a major revision to a form, the edition date of that form will change accordingly. For example, if you saw a form numbered HO 00 03 07 15, you would know that the HO 00 03 form was revised in July of 2015.

Basic, broad and special terms used to describe the perils in these forms have very specific meanings in the property coverage section of the homeowners policy.

Basic, Broad, and Special Coverage

HO 00 04 and 06, provide only contents coverage. These forms are designed for renters who rent instead of own,  or owner-occupants of condominium units, cooperative units, mobile homes, or house trailers. Unless otherwise turned into real property, mobile homes and house trailers are considered personal property.

Each state has a specific minimum limit of liability (the smallest amount of insurance sold in a homeowner's policy) for property coverage under the homeowners forms.
The minimum amount applies to Coverage A for the home or dwelling. This means a house must have a certain insurable value in order to be covered by the homeowners forms. Because the state establishes the minimum permitted, you will find this amount in the State Rate Pages of the Homeowners Policy Program Rules. One state’s Coverage A minimum limits are $25,000 for a primary residence and $15,000 for a secondary residence.

Secondary and Seasonal Residences

A secondary residence may be covered under a homeowners form, but a separate policy, apart from any policy issued on the insured’s principal residence, is required.

A seasonal residence may also be covered under a homeowners policy, and a separate policy is not required. The homeowners program defines a seasonal residence as a dwelling with continuous unoccupancy of three or more consecutive months during any one-year period.

Have you noticed lately that cartons of ice cream or frozen yogurt have gotten a little smaller? This is a marketing trick that many manufacturers are using to help keep the retail prices down. Give them less for the same price, who’s the wiser? You may be interested to know that many insurance companies are using the same method to keep their rates competitive and affordable. This little known stunt is becoming especially popular in coastal states because of the exposure to windstorms. You will also find it getting popular in areas that suffer severe hailstorms. The insurance companies are actually using two different (and sometimes combined) methods for reducing their risk.

Wind & Hail Deductibles – In areas where windstorm and hail is the norm, you will most likely be presented with a higher deductible for these perils. This is usually listed on your policy as a percentage of the dwelling coverage. For example, having a 1% deductible seems negligent at first, but if the dwelling amount is $350,000, that will translate to a $3,500 deductible on your wind or hail claim. That is a substantial out of pocket burden to carry. I find it interesting that this is not very conspicuous on your quote or declarations page. Protect yourself by asking about the deductibles before committing to a purchase.

Roof Surface Endorsement – this is something that raised its ugly head in 2012. A few of the major insurance companies are placing an endorsement (coverage change) on their policies that reduce the valuation of a wind or hail claim on the roof surface by using a depreciation scale. If, for example, your 10 year old roof needs replacing after a wind or hail storm, the insurance company is going to pay the value of a 10 year old roof, not a new roof. This is referred to as “actual cash value” and could leave you paying thousands of dollars to have your roof replaced. And remember, that 1 or 2% deductible comes right off the top before they depreciate the value of your roof. 

It’s interesting that lenders are not screaming about this issue. They are lending money on a very expensive asset that is often not insured to value. If your agent isn’t using replacement value without you knowing about it, you may want to ask why.

 

Categories

  • Bookkeeping
  • Business Marketing
  • Business Taxes
  • Car Insurance
  • Commercial Auto
  • Commercial Insurance
  • Court Cases
  • Cyber Liability Insurance
  • Employment Opportunities
  • Employment Practices
  • Finance & Insurance News
  • Flood Insurance
  • Home Ownership
  • Homeowner's Insurance
  • Insurance Companies
  • Insurance Terms
  • Life Insurance
  • Payroll
  • Pinewood Derby
  • Real Estate News
  • Rental Property Insurance
  • Retirement & Estate Planning
  • RV Insurance
  • Starting A Business
  • Stock Dividends
  • SuiteCRM Insurance CRM
  • Tips & Advice
  • Travel
  • Worker's Compensation

Recent Posts

  • Warning: Multiple links found for relationship – Suitecrm
  • FMCSA Approves Exemption for Mirror-less Trucks
  • Trucking Insurance Cancelled – We Will Find Alternative Commercial Auto Coverage
  • Non-Emergency Medical Transportation Insurance (NEMT)
  • Retail Opportunity Investments Corp. Schedules Fourth Quarter & Year-End Earnings Release and Conference Call

Archives

  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014

1Reason, All Rights Reserved

A Veteran Owned Agency

Currently licensed in Colorado, Florida, Illinois, Michigan, Minnesota, North Carolina, Oregon, Texas, and Wisconsin.