What is Not Covered

What is not covered in a homeowners insurance policy can sometimes be the most important item in the whole insurance conversation. Some types of policies specifically list every risk that is covered within it while others are careful to focus on those perils that are not covered. In many instances, insurance customers experience great confusion about what is and is not covered in their homeowners policy and have sometimes found themselves left high and dry when they file a claim they are not entitled to, and have it refused by their insurance carrier.

There are several different types of homeowners insurance (HOI) policies standardized by the Insurance Services Office (ISO). Each of them addresses a specific situation for the homeowner and provides both property damage and personal liability coverage and none includes natural disaster coverage. Although the ISO stipulates inclusions for each type of policy, homeowners and their insurance carriers do have some discretion to modify the policies to some degree to better suit the particular needs of each homeowner. Fire insurance is a standard inclusion in all homeowners insurance policies, but natural disasters such as flood coverage are never automatically included. They are never covered unless the homeowner specifically purchases coverage for them.

The three most common types of policies are referred to as the standard form homeowners policies because they address the most common property owner situations. The first of these is the Basic, the HO-1 form which covers physical injury liability, the contents of the home, and damage to the property from only eleven listed perils.

There is also the HO-2, the broad form policy, which provides coverage for all eleven of the perils listed in the HO1 and six or so others, and is termed a "named perils" policy because it actually lists the perils that it covers. This policy does not cover any perils that are not listed within it.

The last in this set is the HO-3 form that is usually applied to single-family homes and which provides what is known as "all risk" coverage because it covers every peril that is not specifically excluded from the list included. In this policy the perils that are not covered have to be specifically listed. It, too, does not provide natural disaster coverage.

Next, there is the form HO-4 that is otherwise referred to as renters' or tenants' insurance because it is specifically intended for people who are renting. It provides personal liability coverage and compensation for loss and damage to property in the same ways as do the HO-1 and HO-2 forms except that it does not provide compensation for the structures of the building, because those are the domain of the property owner.

There is a policy known as the Premier Homeowner Policy or HO-5, which is an "open perils" policy and provides all the coverage of the HO-3, and covers any loss that is incurred, as long as that cause is not specifically excluded.

The extent of coverage in the condominium owners policy, the HO-6, could vary depending on which version of the master policy was purchased by the condominium association. The HO-6 is insurance for the owner of the individual condo unit. A unit policy does not cover the items included under the master policy. It does not cover damage to the foundations and supporting structures of the condominium, or accidents and physical injuries that occur in the common or public areas of the complex.

Homeowners insurance does not cover intentional damage caused by the homeowner, nor does it cover normal wear and tear, or damage due to poor maintenance and upkeep of the property.

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