What is Homeowners Insurance?
The homeowners policy provides coverage for the dwelling, other structures on the property and personal belongings for damage from fire, lightening, hurricane and many other causes of loss. It also includes Liability coverage should someone be injured on your property.
The limit of coverage for the home should represent the estimated cost to rebuild the dwelling from the foundation up if the home is totally destroyed. This is on a replacement cost basis; what it costs to repair or rebuild the dwelling at present day costs. We assist in determining the proper limit of coverage for every homeowner. The policy will also include coverage for the costs of living elsewhere while the home is being repaired after a loss.
Who in Massachusetts Needs Home Insurance?
If you own a home, car, condo, or rent an apartment (or house), you need insurance.
Should homeowners forgo getting coverage or let coverage lapse, they may be dangerously exposed to perils that could result in the destruction of their house as well as other potential risks.
For homeowners who have outstanding mortgages, purchasing home insurance is often compulsory. Many banks require homeowners who have mortgages to carry at least enough insurance to cover the bank’s financial interest in the property. Of course, getting more coverage than banks require is often a wise decision.
What Coverages Are Available Through Home Insurance Policies?
Home insurance policies offer a variety of coverages that work together to create a web of protection. Depending on a particular homeowner’s needs, they might want to look for the following protections:
- Dwelling Coverage, which might insure a home itself
- Secondary Structure Coverage, which might insure additional structures
- Personal Property Coverage, which might insure personal belongings
- Personal Liability Coverage, which might insure against various liability lawsuits
- Vacant Property Coverage, which might extend coverage to when a property is vacant
- Loss of Use Coverage, which might cover finding other lodging after an incident
This is just a sampling of the many and diverse coverages that may be available. An experienced insurance agent can help homeowners explore all of their coverage options and select the ones that are right for them.
What is the Difference Between a Closed-Perils and an Open-Perils Policy?Most homeowners policies are either closed-perils policies or open-perils policies. Closed-perils policies generally protect against only the risks that are listed in their documents. Open-perils policies normally cover risks as long as they aren’t specifically excluded. Broadly speaking, open-perils policies provide more robust coverage than closed-perils ones.
What is an HO-3 Special Form Policy?
Many homeowners insurance policies are assigned an abbreviation based on the coverages that they provide. The abbreviations start with “HO” and have a number, and most policies with the same abbreviation offer comparable protections.
HO-3 is simply the abbreviation for a special form policy, which is a common type of homeowners policy. These tend to be open-perils policies that cover a range of potential risks.
In addition to HO-3 special form policies, homeowners may also come across several other abbreviations when getting quotes. Some of the more common other abbreviations are:
- HO-1, which is normally a closed-perils policy with limited protections
- HO-2, which is normally a closed-perils policy with slightly more generous protections
- HO-5, which is normally an open-perils policy with more generous protections than HO-3s have
- HO-7, which is normally used for mobile homes
- HO-8, which is normally similar to an HO-3 policy but designed for older homes