Insurance Forms

An insurance form is another name for an insurance policy, and it specifies what perils your home and belongings are insured against. The following are descriptions of the various insurance forms available for homeowners, renters and condominium owners. Not all insurers use these exact terms to describe their home insurance forms; however, the coverage provided will be similar.

Home Insurance

The five homeowners package forms offered to owners of single family owner occupied homes are HO-1, HO-2, HO-3, HO-3 with HO-15 and HO-8. These policy forms insure your home and belongings against at least 11 named perils. The more perils your policy covers, the more you will pay for the policy.

Basic Form (HO-l) insures your property against the first 11 basic perils shown in the chart.
Broad Form (HO-2) covers the 18 perils listed in the chart.
Special Form (HO-3), the most popular of all homeowner's forms, offers a broad range of coverage. This form provides comprehensive coverage on your home and broad named peril coverage on your contents.
Comprehensive Form (HO-3 with HO-15) covers your home and personal property for everything that is not specifically excluded. This policy generally provides the broadest coverage available, but is not offered by all companies. It usually costs more.
Modified Coverage Form (HO-8) is designed to provide package coverage to the owner-occupants of homes that do not meet all the requirements applicable to other homeowners forms. The HO-8 provides building and personal property coverage slightly more restrictive than that of other homeowners forms for owner-occupants that include a replacement cost clause. The HO-8 is particularly well-suited for residences that have suffered extensive depreciation.

Your home may not qualify for one of the five homeowners package policies; therefore, a company may offer you limited coverage on your house. This coverage may be Fire and Extended Coverage. Your home and only your home would be covered for damage due to very specific perils or losses.

Renters' Insurance

If you rent an apartment or a house, you are responsible for liability coverage and for insuring your personal possessions. Liability coverage protects renters the same as it would if you were a homeowner.

The owner of the property is responsible for insuring the building and for obtaining his or her own liability coverage.

Tenants Form (HO-4), or a renter policy, insures your household contents and personal belongings against the perils included in the home insurance Broad Form (HO-2). (Please see chart.) Like home insurance, it provides coverage for additional living expenses and includes personal liability protection.

Condominium Insurance

Your condominium association should purchase a policy that covers the building, including any common walls and grounds, including liability associated with common properties. You have a right to examine the association policy.

To protect your contents and interior walls, you may purchase Unit-Owners Form (HO-6). An individual unit-owner policy is similar to home insurance and renters' insurance.

Condominium Unit-Owners Form (HO-6) will cover a unit-owner who wishes to insure his or her property or to cover any items not insured by the association's policy. A unit-owner policy will also pay for property damage to personal belongings, wall, floor and ceiling coverings, and any accessories not originally installed in the unit. It also provides personal liability protection.

Optional Coverages You May Wish to Consider

Guaranteed Replacement Cost Coverage - Guaranteed replacement cost coverage is the most complete coverage for your home. To obtain this type of coverage, you typically must meet specific underwriting rules and conditions of the company. This may include increasing the amount of your insurance on a monthly, quarterly or yearly basis to keep up with the inflation rate. Check with your insurance producer to determine if an additional premium is required and if there are exclusions or conditions that apply.
Inflation Guard Endorsement - If the replacement cost of your home is increasing with inflation, your policy limits must be periodically increased to maintain your coverage at 80% or higher. Even though the amount of homeowners insurance you carry is at least 80% of your home replacement cost, this amount of coverage may not be enough in the future.
To aid you in keeping coverage at an adequate level, some companies offer an "Inflation Guard Endorsement." This endorsement will allow your insurance company to automatically change your policy limit during the policy period. Normally, the higher premium is not paid until the time of renewal.

Even if you have this endorsement on your policy, you should check your coverage limits periodically to make sure you are adequately, but not excessively, insured. Not all companies offer this endorsement, so check with your producer or company if you are interested in purchasing it.
Scheduled Personal Property Endorsement - This endorsement is sometimes called a "personal article floater." A personal article floater covers possessions such as jewelry, furs, stamps, coins, guns, computers, antiques and other items that may exceed normal limits in your regular home insurance policy. A personal article floater itemizes each article, gives a description of the article insured and lists excluded perils. It often provides coverage that is broader than the coverage granted in the home insurance policy. There is typically no deductible applied to this coverage.
Increased Limits on Money and Securities - This endorsement increases the coverage on money, bank notes, securities, deeds, etc.
Secondary Residence Premises Endorsement - Homeowners coverage under this endorsement applies to a secondary residence (example: summer home). Remember that these secondary residences are not automatically covered by the home insurance policy on your primary or principal residence.
Watercraft Endorsement - Applicable to small sailboats and outboard motor boats, this endorsement broadens personal liability and medical payments coverage on them.
Theft Coverage Protection Endorsement - As a result of this endorsement, your theft protection is broadened. The contents of your motor vehicle, trailer or watercraft are covered without proof of forcible entry. This endorsement applies only to forms HO-1, HO-2, HO-3 and HO-4.
Credit Card Forgery and Depositors Forgery Coverage Endorsement - Loss, theft or unauthorized use of credit cards (with certain exceptions) is covered by this endorsement. Also covered is the forgery of any check, draft, promissory note, etc., again with certain exceptions. No deductible applies to this endorsement.
Flood Insurance - Standard home insurance policies do not cover flood damage. Depending on where your home is located, you may qualify for flood insurance through the National Flood Insurance Program. Some insurance companies also offer flood insurance. Your producer or insurance company can assist you with application forms for flood coverage. If your home is located in a flood plain, your lender should require flood insurance. Just because your home is not in a designated flood plain don't assume you will never incur flood damage. For more information about federal flood insurance, contact the National Flood Insurance Program at 1-800-638-6620.
Earthquake Insurance - Earthquake insurance is available through most insurance companies at an additional cost. It is normally issued as an endorsement and attached to your home insurance policy.
Windstorm Coverage - Most home insurance policies cover damage caused by windstorm and hail. However, in some areas of certain states, mostly coastal, this coverage is excluded from the standard policy. For more information, ask your insurance producer or insurance company if this peril is covered by your policy.

October 13, 2008