Understanding Home Insurance:
Homeowner’s policy, typically referred to as an HO-3, is generally the most comprehensive coverage which means it is accompanied by higher premiums. An HO-3 policy has two sections: Section I deals with actual property, while Section II provides liability coverage.
Dwelling fire policies cost less; however, what they cover is much more restricted. Dwelling fire policies are typically purchased by landlords to insure their tenant occupied properties or rentals.
What's Covered in an HO-3:
Coverage A provides coverage for the actual house itself – this means the roof, floor, cabinets, plumbing, walls, electrical systems, HVAC systems, etc. Coverage is "all risk." This means, the coverage is applied for “all risks” except for those losses which are specifically excluded. Some examples of typical exclusions are earthquake and flood.
Coverage B specifically covers "other structures" that are on the insured property that are not directly connected to the primary dwelling. For example, sheds and detached garages would fall in this category.
Coverage C covers content or personal property. A good way to describe this is to imagine picking up the house and removing the roof. If you turn the house over, all of the things that fall out are covered under Coverage C. All that remains is covered under Coverage A for the actual structure.
Coverage D provides coverage for additional living expenses that become necessary if a covered peril causes your home to be unlivable while repairs are being made.
Coverage E provides liability coverage. This is typically for property damage or personal injuries to third parties, due to the neglect of the insured. Clients should be made aware of the increasing list of exclusions. For example, many insurance companies are excluding claims for swimming pool accidents, animal liability and trampoline injuries.
Coverage F offers medical payment coverage. This pays for the medical bills acquired by someone injured on the insured property. The important distinction is that this coverage applies, regardless of the existence of negligence. This is no fault coverage.
For any other questions you might have about your home insurance, give Insurance Professionals of Arizona a call today at (480)981-6338.