There are several types of home cover policies available to homeowners.
Whether this is the first time you are shopping for a homeowners insurance policy or if you currently contain a policy, it is always a good idea to be well well-informed to make sure you have your home properly and sufficiently covered. It’s also important to know what your deductible is.
Standardized HO (homeowners) insurance policies include:
1. HO-A provides extremely limited actual cash value coverage for your home and contents. Only the types of spoil specifically listed in the policy are covered. HO-A amended policies provide more widespread coverage than the base HO-A but less coverage than an HO-B.
2. HO-B provides replacement cost coverage for most types of insurable perils, except for exclusions.
3. HO-C policies provide the most general coverage.
When you shop for homeowners insurance, it is very important that you know what your policy covers. Your policy is designed to protect homeowners from insurable perils. These perils can include fire, robbery hurricanes and several other events. Your individual policy is determined by named perils and exclusions. Policies can differ from homeowner to homeowner. With your agent’s help, you can determine how much coverage you and your family need.
To receive full payment (minus your deductible) for a partial loss, you must insure your house for at least 80% of its replacement cost. If you insure for less, the insurance company will only pay for part of the expense of a partial loss. If your home is destroyed and you only have actual cash value coverage, you may not be able to completely rebuild with the claim payment you receive.
With any policy there are exclusions. Your policy typically does not cover injuries to animals or damage to motor vehicles or aircraft. You also are usually not covered for losses due to floods, mudslides, water damage from sewer backups, damage from war or nuclear hazards, neglect, earthquakes, power failures, seepage, dry rot or vermin.
Homeowners insurance policies have different covered perils and exclusions. Check your policy carefully so you understand the kinds and extent of coverage you have.
