Hahn Agency, Inc.Hahn Agency, Inc.
A homeowner's policy provides coverage for many items in addition to the dwelling. These additional items usually have their own limits and sublimits and may not have as broad coverage as the dwelling.
The standard homeowner's policy provides Special Form coverage on the dwelling and Other Structures, and Broad Form coverage on contents. This policy can be identified by it's form number, which is HO-3.
| Special Form coverage means that ALL perils are covered EXCEPT those excluded in the policy. |
When you have a loss with special form coverage, the burden of proof is with the insurance company in denying the claim, (This is to your advantage). |
| Broad Form coverage means that the perils specifically listed in the policy are covered and everything else is excluded. |
When you have a loss with broad form coverage, the burden of proof falls on YOU. |
The dwelling is automatically insured on a replacement cost basis under an HO-3 policy. The policy limit is based upon the insurable replacement cost of the dwelling, not the purchase price. The insurance company will not pay more than the insurable replacement cost of your dwelling, even if your policy limit is higher that the replacement cost. Of course, if your limit is lower than the replacement cost of the dwelling, the loss settlement will not be enough to rebuild your home in the event of a loss. If your insured limit is less than 80% of the insurable replacement cost on your home, you will most likely receive a settlement based upon Actual Cash Value and a deduction will be made for depreciation. The insurance company will determine the insurable replacement cost of your home as part of the settlement process on a large loss. Make sure you are prepared.
It is very important to have the correct insurable value. You are just throwing premium dollars away if you over insure, and you won't have enough money to rebuild if you are underinsured. For a FREE insurable replacement cost estimate of your home from Hahn Agency, please go to the Dwelling Replacement Cost Estimator.
The contents coverage is on an actual cash value basis but is usually endorsed to include replacement cost coverage.
| Replacement Cost means that you will receive "new for old" in the event of a loss. |
| Actual Cash Value means that a deduction will be made for depreciation. |
The HO-3 homeowners contract is comprehensive and provides adequate protection for most losses that occur. However, certain losses are not typically covered by this form. Please see Coverage Gaps for important information regarding common "holes" in a typical homeowner's insurance policy.
| Dwelling: | The amount of insurance to replace the primary structure. The premium is determined from this amount and all other property coverages are usually an additional percentage of this figure. This amount is the insurable replacement cost of the building, not the purchase price. See Replacement Cost Estimator to get a FREE insurable replacement cost analysis of YOUR home. |
| Other structures. | Applies to other building on your property, such as detached garages, outbuildings, fences, sheds, etc. usually 10% of the dwelling amount. |
| Personal property | Applies to your personal contents. usually 50-70% of the dwelling amount. This coverage has limitations for loss by theft to certain classes of property. |
| Loss of Use | Applies to the additional living expenses incurred when you have to arrange temporary living quarters when your home becomes uninhabitable due to an insured peril. For example, your mortgage payments would continue in the event of a loss. You would also have the additional expense of renting a temporary residence while your home is being rebuilt. This additional cost to you is picked up by the Loss of Use coverage. |
| Personal Liability | Provides unlimited defense and a set amount, usually $300,000.00, for judgments against you by a third party due to your negligence. Does not apply to auto related occurrences. Coverage applies for acts on your residence and away from your residence. May include coverage for libel and slander depending upon your insurer. |
| Medical Payments | Pays for medical care for individuals injured on your property regardless of fault. Does not apply to an insured individual as defined by the policy. |
| Scheduled coverage | Optional contents coverage for certain classes of property such as jewelry, furs, and silverware. These limits are in addition to the unscheduled contents limit. By scheduling coverage, you are avoiding the theft limitations imposed under the unscheduled contents coverage. |
There is usually no deductible on the scheduled coverage. The personal liability coverage and medical payments coverage also do not have a deductible.
This is just a brief overview of a typical homeowner's contract. Please review your own policy for coverages and conditions.
If you would like a competitive insurance quotation and would like to avoid the common gaps in a typical homeowner's policy please Request a quote.
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