Homeowners Policy (HO)
Homeowners policies package property and personal liability coverage into a single contract for owner-occupants, renters, and condo owners. This chapter covers the standard HO forms, the Section I and Section II coverages, and how special limits work.
The Homeowners Forms
Standard Homeowners forms serve different needs. HO-2 (broad) covers the dwelling and personal property on a named-perils basis. HO-3 (special) is the most common, covering the dwelling on an open-perils basis and personal property on a named-perils basis. HO-5 (comprehensive) covers both on an open-perils basis. HO-4 is the renters form (contents and liability, no building), HO-6 is for condominium unit owners, and HO-8 (modified) is for older homes where replacement cost far exceeds market value, settling losses on a functional or actual cash value basis.
Section I: Property Coverages
Section I of a Homeowners policy provides property coverages: Coverage A (dwelling), Coverage B (other structures), Coverage C (personal property), and Coverage D (loss of use, including additional living expense). Coverage C often applies worldwide and includes special sublimits that cap payment for high-theft or high-value categories such as cash, jewelry, watches, furs, firearms, and silverware. Insureds who need more can schedule those items on a personal articles endorsement for higher, itemized, and broader coverage.
Section II: Liability Coverages
Section II provides personal liability protection: Coverage E (personal liability) pays damages and provides a legal defense when the insured is legally liable for bodily injury or property damage to others, and Coverage F (medical payments to others) pays reasonable medical expenses for a non-resident injured on the premises or by the insured's activities, on a no-fault basis. Coverage F does not apply to the insured or regular household members, and paying small claims quickly can help avoid larger lawsuits.