Source: Florida office of insurance Regulation (https://www.floir.com/sections/pandc/homeowners/default.aspx)
Homeowners' Insurance
Definition
Homeowners' insurance is a specific type of property insurance. Homeowners' insurance covers damage or loss by theft and against perils which can include fire, and storm damage. It also may insure the owner for accidental injury or death for which the owner may be legally responsible. Mortgage lenders usually require homeowners' insurance as part of the mortgage terms.
The standard homeowners' insurance policy is divided into several component parts:
Coverage A: Structure (the dwelling itself)
Coverage B: Other structures (sheds and fences)
Coverage C: Personal property (contents of the structures)
Coverage D: Loss of use (Additional Living Expense or ALE)
Coverage L: Personal Liability
Coverage M: Medical Payments to Others
While homeowners' insurance can specifically refer to the insurance of a house, it also encompasses the insurance of other types of structures associated with personal residences including tenants (renters) and condominium unit owners.
Homeowners’ Insurance Policies
There are multiple types of Florida homeowners’ insurance policies.
HO-1 — Basic Form
HO-1 policies are the most basic form of homeowners’ insurance. HO-1 is a named peril plan, so anything that happens outside of the perils specifically named in the policy is not covered.
The basic type of homeowners insurance only covers 10 perils: fire or smoke, explosions, lightning, hail and windstorms, theft, vandalism, damage from vehicles, damage from aircraft, riots and civil commotion, and volcanic eruption.
Due to the fact that insurance plans that offer more coverage are only slightly more expensive than this basic plan, many home insurers chose not to carry HO-1 insurance.
HO-2 — Broad Form
HO-2 policies are a broad type of home insurance. Similar to HO-1 policies, this type of home insurance only covers perils named in the policy.
Aside from covering the home’s structure, HO-2 usually covers personal belongings, and some policies provide coverage for personal liability. The broad type of homeowners’ insurance covers all of the perils named in HO-1.
In addition, HO-2 also covers accidental discharge or overflow of water or steam, falling objects, freezing of household systems like AC or heating, sudden and accidental damage from an artificially generated electrical current, sudden and accidental tearing apart, cracking, burning, or bulging of pipes and other household systems, as well as weight of ice, snow, or sleet.
HO-3 — Special Form
HO-3 policies are a special type of home insurance. HO-3 is an open-peril policy, as opposed to a named-peril policy like HO-1 and HO-2. That means unless the insurer excludes a peril from the policy, then the policy covers any kind of peril, named or not.
Typically, an HO-3 policy will cover the home’s structure, as well as any structures that are attached, like a carport or garage. The policy should also provide coverage for personal belongings and personal liability, if someone is injured on the insured property. HO-3 is commonly offered by today’s leading home insurers.
Note: Insurers often exclude earthquakes and flooding from HO-3 plans and offer coverage for them separately from the main policy. Consumers are encouraged to speak with their agent about obtaining separate flood insurance coverage. Learn more about private flood coverage
HO-5 — Comprehensive Form
HO-5 policies are a comprehensive type of home insurance. Like HO-3, comprehensive homeowners’ insurance is open-peril and will cover anything that’s not excluded from the policy. Although HO-5 is similar to HO-3 in terms of coverage, there are a few important differences between the two kinds of home insurance.
While HO-3 only offers open-peril coverage on the home’s structure, HO-5 features open-peril coverage for personal belongings, as well as the structure of the home. After filing a claim, HO-5 pays out the replacement cost of the covered item, while HO-3 only replaces the item’s actual value. An HO-5 policy also has higher limits of coverage for valuables like jewelry.
Other differences between the two policies can differ by insurance company. While policies can differ by insurance company, HO-5 policies are usually more expensive than HO-3, and fewer homes are eligible for an HO-5 policy.
HO-8 — Older Home Form
HO-8 policies are typically used to cover homes that are 40-years old or older. If homes built decades ago are damaged or destroyed, then the materials needed for replacement are often more expensive than the home’s value. So, insurance companies use this type of home insurance to offer affordable coverage to people who own older homes.
Like HO-1 and HO-2, older home insurance uses named-peril policies. HO-8 policies usually cover dwelling, personal property, liability, and loss of use from named perils.
The named perils included in a HO-8 policy are the same perils named in an HO-1 policy. Rather than replacement cost coverage included in HO-5, older home policies usually use common construction pricing for paying out claims, which means that a rough equivalent of the destroyed material can be used for replacement.
Renters Insurance Policies
HO-4 Tenant
HO-4 policies are commonly known as renters insurance and provide coverage for tenants who want insurance for their rented dwelling. The purpose of this kind of policy is to protect items within the dwelling, as well as any permanent fixtures like cabinets that were installed by the renter.
Most renters insurance are named-peril policies that cover the same perils listed in HO-2 policies. Renters insurance usually provides coverage for personal property, liability, medical payments to others, and additional living expenses resulting from loss of use.
Aside from permanent fixtures inside the dwelling installed by the renter, HO-4 does not provide coverage for any structures.
Condominium Insurance Policies
HO-6 — Condo Form
HO-6 policies offer coverage for condominiums. The condo type of home insurance is often referred to as “walls-in” coverage, because it covers the interior of a structure, while the condo association’s master policy will cover the exterior structure and common areas.
Condo insurance usually uses a named-peril policy, but some insurance companies will allow the coverage to be extended to an open-peril policy, which will also mean paying a higher premium.
HO-6 policies will generally provide coverage for building property, personal property, personal liability and loss of use. Like other kinds of home insurance, HO-6 usually doesn’t cover flooding, and additional coverage will need to be purchased if flood insurance is desired.
Mobile Home Insurance Policies
HO-7 — Mobile Home Form
HO-7 policies provide specialized home insurance coverage for manufactured homes. HO-7 policies cover dwellings like RVs, trailers, sectional homes, as well as single-wide and double-wide mobile homes.
Mobile home insurance usually features open-peril policies very similar to HO-3. Under an HO-7 policy, dwelling, detached structures, personal property, and liability are generally covered. Like other kinds of home insurance, the age or size of the structure will probably affect the price of the premium with a HO-7 policy.
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