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Types of Homeowners Policies

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Types of Policies

There are two types of policies: all risks and named perils. A named perils policy covers losses that are due to only those perils listed in the policy. The perils typically covered include fire, windstorm, hail, and other direct physical losses. An all risks policy covers losses that are due to any peril except those specifically excluded in the policy. It is important to note the all risks policy provides broader protection than
do named perils policies. The five types of homeowner packages offered to owners of single family owner occupied homes are HO-1, HO-2, HO-3, HO-3 with HO15 and HO-8.

HO-1 Basic Homeowner
Insures your property against the following 11 basic named perils: fire/lightning, loss of property removed from premises endangered by fire or other perils, windstorm/hail, explosions, riot/civil unrest, aircraft, vehicles, smoke, andalism/malicious mischief, theft, and breakage of glass constituting a part of the building.

HO-2 Broad Basic Homeowner
Insures your property against the 11 basic named perils in HO-1 plus 7 additional named perils: falling objects, collapse of roof due to weight of ice or snow or sleet, collapse of building(s) or any part thereof, bursting of steam/hot water system, leaking of plumbing or heating system, freezing of pipes, sudden and accidental damage from artificially generated currents to electrical appliances or devices or fixtures or wiring.

HO-3 Special Extended Homeowner
Provides for comprehensive coverage (all risks) on your home and the 18 (HO-2) broad named perils coverage on your contents. This is the most popular of all homeowner policies.

HO-3 with HO-15 Comprehensive Homeowner (all risks)
Covers your home and personal property for everything that is not specifically excluded. This policy usually provides the broadest all risks coverage available, but is not offered by all insurance companies.

HO-4 Renter's Coverage
Insures your household contents and personal belongings against the named perils in HO-2 policy. It also provides coverage for additional living expenses and includes personal liability protection.

HO-6 Condominium Unit Homeowner
Covers items not insured by the condominium association's policy, such as, property damage to personal belongings, wall, floor and ceiling coverings, and any accessories not originally installed in the unit. An HO-6 policy is basically an HO-2 policy. It also provides additional coverage for personal property, loss of use, personal liability and medical ayments.

HO-8 Modified Homeowner
Homeowners-8 (HO-8) or Market Value Policy is a modified version of the HO-1 policy, providing actual cash value coverage in place of replacement cost coverage for a building. In no event will the company’s settlement figure exceed the amount necessary to repair or replace the dwelling. This policy form is generally
used when the replacement value of the property exceeds its market value, as in the case of older homes which are considered "white elephants". This coverage is more restrictive much like HO-1. HO 8 is for the owner of an older home who has trouble purchasing standard homeowners insurance. It resembles other homeowner policies, but provides limited theft coverage, and loss settlements are based on actual cash value. Actual cash value is the replacement cost minus any depreciation (decrease in the value due to age, wear and tear since the time the structure was built or purchased.)

For more information on policy types: PA Insurance Department

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