Types of Homeowner Policies – PART I

Big single-family home

Homeowner's Policy

Types of Homeowner Policies – PART I

We will describe parts of the most common homeowner policies, HO-3, HO-4, and HO-6, because there are a number of policies out there. This is a review of parts of the policy not an expend explanation. For detailed explanation of the policy you can contact your lawyer or claim adjuster.

HO-3 is the most common policy for single family dwellings. The reason is that for the structure it’s an “all risk” policy. This means that if a cause of loss is not specifically excluded, then the insurance company will be hard-pressed to make a case for denial of your claim. For personal property: only losses that are covered are listed in the body.

HO-4 its personal property policy as it only covers personal property owned by renters. If a fire occurs and the building burns down the renter will not get anything for the building but the personal property owned inside are covered.

HO-6 (condominium form) is generally considered a personal property policy. This is because the structural coverage is scarce compared to the HO-3: it is limited to surfaces of the walls, floors, ceilings, and anything attached to the surfaces such as kitchen cabinetry and fixtures.

We will focus on Section 1 of the HO-3 policy.


There are several parts to a homeowner’s policy. They are:

  • Declarations
  • Definitions
  • Insuring Agreement
  • Exclusions
  • Conditions

The declaration includes all the information declared by you and the insurer to each other. The page contains:

  • personal contact information
  • property covered
  • type of policy
  • the policy number
  • deductible amount
  • premium amount


Structural coverages include the insured dwelling, structures attached to it, and the construction materials and supplies. It does not include the land in which these elements are situated.


ALE applies only if the house is rendered inhatible due to a covered loss. It considers cost for things such as room and boards in temporary housing and is normally set at 25% of the structural limit.


Structures on the insured property not attached to the dwelling such as in-ground pools, spas, sheds, carports, fences, retaining walls and detached garages are a few examples.
The limit is normally 10 percent of the Coverage A limit.

Coverage C addresses personal property (the contents inside). It covers your personal property whether you are home or not. Except it only covers specific kinds of losses and it may be subject to limits.

Some claims are small and the total amount can be less than it costs the insurance company to process them. Deductibles depend on the type of loss being claimed.

The biggest limit in the homeowner’s policy is the liability limit. Is the maximum amount the insurer will pay. Another is structural limit. This is the amount it will cost to rebuild the entire dwelling in the event of a total loss.

Content limit pays for furniture and other items in the house that are not permanently installed onto the structure.

Not every loss is covered. Some causes of loss that are not covered:

  • Maintenance – lack or poor maintenance is the responsibility of the owner.
  • Faulty, inadequate or defective planning, zoning, development, surveying or siting.
  • Faulty, inadequate, or defective design, specifications, workmanship, repair, construction, renovation, remodeling, grading or compaction.
  • Materials used in repair, construction, renovation or remodeling.

There is a policy provision requiring the insured to “mitigate damages”. This means that it is the policyholder’s responsibility to see to it that any potential additional damages are prevented or at least minimized.

This provision is found in the Conditions section and it reads as follows:
“Suit Against Us. No action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss”

Trees, shrubs, plants or lawns are covered only if the damage occurred due to specific causes. They are:

  • Fire or Lightning
  • Explosion
  • Riot or Civil Commotion
  • Aircraft
  • Vehicles Not Owned or Operated by a Resident of the insured property
  • Vandalism
  • Malicious Mischief
  • Theft

Wind or hail damage to trees is excluded. There’s a limitation to the coverage available under this provision. It consists of up to 5% of the structural limit for all damaged trees, shrubs, plants or lawns on the insured property.

The following property is not covered under the standard homeowners policy.

  • Any insured in another policy or that is completely insured in a separate rider attached to the homeowners policy
  • Animals, birds or fish (pets)
  • Motor vehicles
  • Aircraft or other parts. However hobby or toy planes are covered
  • The property belonging to roommates or tenants. This exclusion does not apply to roommates or boarders related to you.
  • If you owned a fully furniture apartment and rent it to others, the personal property included in the rental is not covered.
  • Business Data-bookkeeping and accounting records. The policy does cover blank storage or electronic media and over the counter computer software.

Unless damage to personal property was a result of one of the following sources, there’s no coverage (Check your policy for exclusions)

  • Fire or Lighting
  • Windstorm or Hail
  • Explosion
  • Riot or Civil Commotion
  • Aircraft
  • Vehicles
  • Smoke
  • Vandalism or Malicious Mischief
  • Theft
  • Falling objects
  • Weight of Ice, Snow, or Sleet
  • Accidental discharge or overflow of water or steam
  • Sudden or accidental tearing apart, cracking, burning or bulging
  • Freezing
  • Sudden or accidental damage from artificially generated electrical current
  • Volcanic eruption

This includes parts of the homeowner’s policy. Hope this helps.

South Florida Residents – If you have damage in your home we can review your policy. Call Us at 786-248-1147


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