The insurance industry is a lot like medicine or engineering with its own special language. That unusual language is most notably visible on homeowners policies and homeowners insurance forms.
These policies are chock full of insurance speak. They include the four parts of every insurance policy, plus definitions, endorsements and a bunch of “HO Forms,” or homeowners insurance forms.
Understanding each of these different pages and forms is the only way to ensure you have the right coverage for your needs.
Definitions
State insurance departments require that homeowners policies include a definitions page. Unfortunately, these definitions are often ignored by policyholders because they recognize the words and believe their everyday definitions apply, which they don’t
Insurance industry definitions do not always match up with the most common uses in everyday English. This is why it’s important to carefully read all of the definitions on this page. Misunderstanding one or more of them can result in your not being protected when you think you are.
Endorsements
The endorsements page of a homeowners policy can change what is said elsewhere in the policy. This can be in the form or adding or removing coverage for specific risks or damages. The endorsement page may also add optional coverage, usually for an additional premium which you may not want or need.
You should carefully read the endorsements page on both new policies and renewals. Insurance companies will often use endorsements as a means of limiting coverage provided by one of the homeowners insurance forms. By accepting an endorsement you may be limiting your coverage regardless of what is said elsewhere in the policy.
Homeowners insurance forms
The HO in HO Forms stands for homeowners and each describes specific protections for your home. The homeowners insurance forms are uniform from state to state and company to company and can be modified by the endorsements page.
If you own a single family home, there are seven homeowners insurance forms that can be a part of your policy. Since not all of the homeowners insurance forms are required or necessary, it is important that you understand what your options are.
HO-1
This form is a part of all homeonwers policies and is considered basic homeowners insurance. It covers both your house and your belongings from loss or damage from these 11 named perils:
- Fire or lightening
- Smoke
- Windstorm or hail
- Explosion
- Riot or commotion
- Aircraft
- Vehicles
- Glass breakage
- Vandalism or malicious mischief
- Theft
- Volcanic eruption
HO-2
Some insurers offer form HO-2 in place of HO-1 because it covers the same 11 perils plus six additional ones. Other insurers issue policies with both HO-1 and the optional HO-2 in place.
Since HO-2 protections are optional, adding or removing them from your coverage will change your premium. The perils named in this form are:
- Falling objects such as blue ice from airplanes, meteorites and satellites.
- Weight of ice, snow or sleet.
- Accidental discharge or the overflow of water from plumbing or related systems. Sump pumps are expressly excluded from this coverage.
- Sudden and accidental rupture of your heating, air conditioning, hot water heater or fire sprinkler system.
- Freezing of plumbing or related systems.
- Sudden and accidental discharge from artificially generated electricity.
Claims for damages from the last four items in this list must not be because of poor maintenance. For example, freezing pipes are covered if you lose heat because a fire damaged your furnace. You are not covered if you didn’t keep your house above freezing because you didn’t want to pay for heat while you were away.
HO-3
This is one of the most popular optional homeowners insurance forms and one of the most commonly misunderstood.
This homeowners insurance form says that it provides “all risk” coverage for your home when in fact it has limitations and exclusions such as flooding. This form offers protection above and beyond what is covered by HO-1 and HO-2.
The named exclusions on this form include; flooding, war and nuclear accidents, along with other natural and man made disasters.
HO-3 with HO-15
There is no such thing as a “standalone” HO-15. It only exists as an endorsement to an HO-3. Why not just make it a part of the HO-3 rather than a separate form? Beats me!
This endorsement brings the promise of all risk coverage a step closer to reality. It protects you from all risks that are not specifically excluded. This form may still be called HO-5 in some states.
HO-4
This homeowners insurance form does not apply to single family homeowners and is commonly referred to as renter’s insurance.
It provides the same protections as HO-2 or HO-3 if you are a renter regardless of whether it is a house or apartment.
HO-6
Popularly referred to as condominium insurance it provides similar protections to the homeowners insurance forms HO-2 or HO-3.
HO-8
This homeowners insurance form is only available if you own an older home. The coverage is similar to HO-1 but limits reimbursement to market value rather than replacement cost.
The reason is many older homes would cost far more to replace or restore to their original condition than comparable newer homes.
