Page 26 - Book1

Claim Your Insurance Lottery Ticket

XII

Types of policies

Homeowners Insurance Policy
The type of policy depends on the structure to be insured and how that
structure is occupied. These policies insure your home and personal property
against numerous perils. Depending on the type of policy, some of the perils
that might be covered by your insurance company include: fire or lightning,
windstorm or hail, explosion, riot or civil commotion, aircraft or vehicle
collision, smoke. Other perils include: vandalism or malicious mischief, theft,
falling objects, accidental discharge or overflow of water or steam, and
sudden, accidental damage from artificially generated electrical current,
among others. There are five policies that are the most frequently offered to
homeowners so they can insure their property in the state of Florida:
1. Owner-occupied: There are three types of policies which cover
owner-occupied, single family homes:
a. Basic Form or HO-1;
b. Broad Form or HO-2;
c. Special Form or HO-3 policies.
HO-1 and HO-2 only cover the structure for specific perils
mentioned in the policy. However, HO-1 is not frequently sold
nowadays, because its coverage is too narrow. The HO-2 or
Broad Form policy also covers living expenses in cases where
the insured property is unsuitable for living. Some of the perils
usually covered are windstorm, lightning, hail, and fire or
explosion. In this type of policy, if a peril is not explicitly
included, then it is excluded from coverage. Contrarily, the HO-3
policy – also known as Homeowners 3 or Special Form – covers
any direct damage to the house and other structures on the
property caused by any perils that are not explicitly excluded in
the policy; this policy is the most commonly bought, because it
has the minimum coverage required by lenders. In the case of
loss of personal property, the coverage only protects against
losses due to the dangers listed on the insurance policy.
2. Condominium Unit-Owner or HO-6: This policy primarily
provides coverage for personal property and liability of the
insured, as well as some coverage for the structure. This type of
policy typically covers listed perils, but additional coverage can
be purchased. It also provides Loss Assessment Coverage,
which means it pays your share of expenses on common
property loss.
3. Renters, HO-4, or Contents Broad Form: It is a variant of the
HO-2, aimed towards those who rent rooms, apartments, or
houses. It covers the insured's personal property that is within
and outside the structure. Also, it includes liability insurance for
damaged property and for injuries to the other people in the

26