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Homeowner’s Insurance: The Basics

Posted by Johnine Larsen on May 8, 2017
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Homeowner’s insurance covers four things:

1. Your Home
If your home is damaged by fire, hail, lightning, hurricane, or another disaster, homeowner’s insurance will give you money to repair or rebuild. This coverage also extends to other structures on your property, like a shed or garage.

Exclusions: General homeowner’s insurance does NOT cover damage caused by flood, sewer backups, earthquakes, or age/use—if you want protection from those, you’ll need designated flood, sewer, or earthquake insurance.


2. Your Stuff
In the event of fire, lightning, vandalism, riot, theft, explosion, falling aircraft (seriously), hurricane, or most other disasters, homeowner’s insurance will replace your lost/damaged belongings. Unless you’ve rejected “off-premises coverage,” insurance will pay even if the damage/loss did not happen in your home.

Exclusions: Max payout is usually capped around 50 to 70 percent of the value of your home; valuable single items (jewelry, antiques, furs, etc) have a dollar limit; and trees, scrubs, and other plants are only covered for about $500/plant (and excludes damage caused by wind or disease).


3. Your Guests
If someone or someone’s stuff gets hurt/damaged in your home, or if you (or your pet) hurt/damage someone anywhere, homeowner’s insurance steps in and pays to defend you in court. It also covers whatever damage you caused. You can get an umbrella policy to expand your protection to include things like libel and slander.

Exclusions: You still have a limit, which usually starts around $100,000.


4. Additional living expenses

If you can’t live in your home because it’s too damaged or still being repaired, homeowner’s insurance pays for you to live somewhere else. It pays for a hotel stay, eating out, and other living expenses.

Exclusions: The house must have been rendered uninhabitable by a fire, storm, or other insured disaster. What qualifies as a covered living expenses varies from company to company.

Homeowner’s insurance has three coverage levels:

1. Cash
You’ll get cash to replace your home or possessions—minus a deduction for depreciation.
2. Replacement
Insurance will pay the bill for rebuilding or repairing your home, or the bill for replacing your possessions. There is NOT a deduction for depreciation.
3. Guaranteed/Extended Replacement Cost
This is the highest level of protection. Insurance will pay whatever it costs to rebuild your home as it was before the disaster damaged it, even if that costs is higher than your policy limit.

Homeowner’s Insurance fits various living situations

HO0 – Dwelling Fire Form
Coverage on a home against fire, smoke, windstorm, hail, lightning, explosion, vehicles, and civil unrest. It does NOT cover personal property, personal liability, or medical expenses. It is the type of policy a mortgage lender will buy for a borrower if the borrower’s homeowner policy lapses.
HO1 – Basic Form
Coverage on a home against 11 possible disasters, including fire or lightning, windstorm or hail, vandalism or malicious mischief, theft, damage from vehicles and aircraft, explosion, riot or civil commotion, glass breakage, smoke, volcanic eruption, and personal liability. Does NOT include floods, earthquakes. Most states no longer offer this type of coverage.
HO2 – Broad Form
Coverage on a home against 16 listed possible disasters (including all 11 on the HO1). The coverage is usually a “named perils” policy, which lists the events that would be covered.
HO3 – Special Form
The typical, most comprehensive form used for single-family homes. The policy provides “all risk” coverage on the home with some perils excluded, such as earthquake and flood. Contents are covered on a named-peril basis.
HO4 – Contents Broad Form
For renters. It covers personal property against the same possible disasters as the contents portion of the HO2 or HO3. It generally also includes liability coverage for personal injury or property damage inflicted on others.
HO5 – Comprehensive Form
Covers the same as HO3, plus more possible disasters. On this policy the contents are covered on an open peril basis, therefore as long as the cause of loss is not specifically excluded in the policy it will be covered for that cause of loss.
HO6 – Unit-Owners Form
For condominium owners. It insures personal property, walls, floors, and ceiling against all of the possible disasters in HO4. A separate policy purchased by the condo association covers the rest of the building.
HO8 – Modified Coverage Form
For owner-occupied older homes whose replacement cost far exceeds the property’s market value.

Tip: Every so often, take a camera, document everything in your home, and save the photos to the cloud or somewhere else off-site. This way, if you make a claim, you have proof of ownership.

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    Virginia Bunker
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    linda wright
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    Paddy Lazar
    23:42 03 Dec 19
    I was lucky enough to work with Johnine and her very competent team to sell my home. I have to tell you how easy the entire process was. On her wise suggestion I had my home inspected, as there actually were a number of maintenance items that came up in that inspection and she even arranged to have all of the repairs completed in a very short time. The only thing I had to do was to let the repair folks in. Then, to my surprise, Johnine , had all the windows and the whole house cleaned before listing it. She then had the house beautifully staged and had the yard cleaned up with even a little landscaping thrown in. The house sold within the week for OVER full price! Everyone I dealt with was always kind, helpful and professional, their communication was exemplary all through the process. I’ve decided to rent for a while but you can be assured that it will be Johnine and her team that I will go back to when ready to purchase a new house. I have sung her praises to all that I know.
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    soumak ghosh
    00:00 14 Nov 19
    They were representing the seller and I was the buyer. Very limited communication from the agents. Waited days for a response for any email/text. Would eventually get a response after multiple follow ups. Almost cost us the deal. [Update] I have seen all the text/conversations of my agent with your agency. Regarding the oil tank decommissioning, according to the contract, the tank was to be decommissioned 5 days before closing. When asked about so 5 days before closing ( which I have seen the text/email conversations of), you gave my agent very little to no information about it and even said it was on schedule. It was only after my agent called the oil decommissioning company that we got know that it was not even scheduled to decommission it 2 day before closing. Any buyer who was not as intent on buying the property could have walked away due to breach of contract. We got the final documentation 2 hours before the end of closing. It was only after I wrote the review that your agents became responsive. P.S. If you find my review unjust I’m sure it would be overshadowed by stellar reviews from future customers.
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    Beth Guerra
    01:14 18 May 19
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    Aidan Key
    15:44 17 May 19
    Johnine and the Real Estate Gals brilliantly took us through the home buying process two different times. Their willingness to educate (I was new), hear our home hopes, and support us through the process are a few of the reasons that I highly recommend this team. Speaking of a team, I love their collaborative business model - it meant that we--the home buyers--always had a returned phone call and an ability to look at a house on OUR schedule. Truly felt like they place the customer first!
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