The homeowners policy provides protection against the financial consequences of personal losses. A homeowners
policy is a combination of property and liability coverages. The homeowners policy is tailored to meet the needs of a homeowner. The following is a basic outline of the Homeowners (HO-3) policy and the endorsements most widely
used on the HO-3 policy. There is an enhanced form, HE7, available in North Carolina that broadens some of the
coverages and increases some of the limits of coverage described below. There are also Homeowner Forms for
Renters (HO4) and Condominium Unit Owners (HO6).
The HO-3 policy provides coverages for one or two family dwellings that are owner occupied. The HO-3 policy
provides coverage against risks of direct physical loss to real property, except for those causes of loss that are
specifically excluded such as flood, nuclear radiation, earthquake, insects & termites, and normal wear and tear.
Personal property is covered against direct physical loss caused by a specified peril such as fire, lightning, wind,
smoke, explosion, civil commotion, hail, aircraft, vehicle, riot, theft, and freezing/burst pipes. In addition to the
coverages stated under Section I, several additional coverages are included. Some of the coverages included
are; debris removal, fire department charges, reasonable repairs charges, property removal charges, and coverage
for trees, shrubs and plants. Coverage is also included for loss involving credit cards, forgery, and counterfeit money.
These additional coverages are included to provide protection for the insured following a covered property loss.
Each additional coverage has limitations and is subject to certain conditions.
Dwelling
This amount of insurance applies to the dwelling and attached structures. The limit of insurance for the dwelling is
based on the value of the home and what it would cost to replace the home.
Other Structures
This coverage limit applies to detached structures such as a garage or storage shed. The limit of coverage is set at
10% of the dwelling. The insured can purchase a higher limit.
Personal Property
Coverage C provides worldwide coverage for personal property of the insured. Special limits apply to some types
of property, and some property is excluded from coverage. The overall limit for coverage C is usually 70% of the
dwelling limit. Coverage C can be modified in several ways with endorsements.
Loss of Use
This coverage applies in the event of a loss under Coverage A. If the insured was to temporarily lose use of the
dwelling this coverage would apply. Payment would be made for additional expenses incurred to live elsewhere
following a loss that makes the home unsuitable for living. Another method used to determine payment for loss
of use is fair rental value, which is the amount of rent that could reasonably be charged for the premises, less any
expenses that do not continue while the premises are unsuitable for living.
Personal Liability
Section II of the homeowners policy provides liability coverage for personal loss exposures. The insuring agreement
under Coverage E provides liability coverage if a claim is made or suit is brought against an insured because of bodily
injury or property damage. Coverage is provided for the residence premise as well as any other premises used by the
insured, as a residence, permanently or temporarily. Liability coverage is provided for the named insured and members
of the named insured's household who are relatives. Personal liability has a basic limit of $100,000 per occurrence,
which the insured may increase for an additional premium. In addition to the basic limit, Coverage E also provides
additional coverages for expenses such as defense cost, expenses incurred providing first aid to others, damage to
property of others and loss assessment charges. The additional coverages provided under Section E are subject to
limitations and certain conditions.
Medical Payments
This coverage will pay the necessary medical expenses for bodily injury of others. Coverage applies to accidents
that occur on the insured premises or any location when caused by action of the insured. The coverage has a
basic limit of $1,000 per person. The insured may select higher limits.
Endorsements
Earthquake Coverage Endorsement
Increase Other Structures Limit
Increase Special Limits
Scheduled Personal Property
Personal Property Replacement Cost
As always, we highly recommend that you sit down with one of our experienced account executives to discuss
your specifics needs, after which we will provide a detailed insurance strategy and quote for your business.
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We are a United States company. We are licensed to sell Business Insurance in the following states: NC, SC, VA, GA, FL, PA, IN, MD
We are licensed to sell Personal Insurance in the following states: NC, SC, VA
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