Homeowners insurance can be a life saver in many instances and obviously it is a must have, but not many homeowners think twice about the insurance that protects their investment. What does the standard homeowners insurance policy really cover? While policies may vary, it’s important to know what is covered and what’s not.
HO3 – Special Form Homeowner Policy is the typical, most comprehensive form used for single-family homes. The policy provides “all risk” coverage on the home with some perils excluded. Contents are covered on a named peril basis. (Note: “All Risk” is poorly termed as it is essentially named exclusions (i.e., if it is not specifically excluded, it is covered)) – Source: Wikipedia
Insurance covers both structural and personal property after the following circumstances of damage or theft and this can include anything from structural repairs, plumbing and wiring to personal items such as your computer, TV and even clothes.
- Fire and/or lightning damage
- Windstorms including hurricanes, tornadoes and hail damage
- Damage from vehicles or flying objects
There are many natural disasters and unfortunate circumstances that can happen that are ironically not covered. In these circumstances, it’s generally something that is widespread across the U.S. with higher risks. There are supplemental insurance policies that will cover some of these incidents, but generally, they are not covered under a standard homeowners insurance policy.
- Earthquakes, sinkholes and other earth movement
- Pest Damage: Termites and insect damage, rodent damage and overall wear and tear.
- High Valued Personal Property: Standard policies generally have a cap on the amount they will pay for personal property, more high dollar items such as jewelry, firearms and silverware may need to be covered separately.
- War: Nuclear war, civil war or any war in general
All the above information is based on the HO-3 “Standard” Homeowners Insurance policy as defined by Insurance Service Office. Policies may vary from location to location, and it is best to consult with your local insurance professional about what is and is not covered in your area.
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