There's no place like home! It just doesn't matter where you go or what it is you're doing, there comes a time that you are ready to go home. It's where we relax, raise our kids, have family meals, have social gatherings, celebrate holidays and enjoy our family! Simply put, it's an extension of us, who we are and how we live.
Our homes are usually one of the biggest, if not the biggest, investments that we will make in our lives. When we buy one, we pack it full of our things like furniture, electronics, clothing, keep sakes, heirlooms, etc. All of these things continue to add to our investment over time.
Protecting that investment is very important and we take it very serious. As an Independent Agency we utilize many different Insurers to accomplish this.
Insuring you home is not as easy as it may seem, because there are many different types of policies that you can buy to insure your home. They can range from a simple Fire policy to an extremely Comprehensive policy. I'll do my best to keep this as short as I can while trying to explain it as clearly as possible.
Since Insurance policies for Homes vary so much, please note that I am giving a very basic explanation that is only meant to help you obtain a better understanding of these policies and the coverages that can be purchased. This is not meant as a guideline of coverage for any policy nor is it meant to be a legal or binding explanation of any policy. If you have a question about your policy, refer to your policy or contact your Agent for assistance.
Let me start out with what a "peril" is. A peril is a cause of loss such as fire, lightning, windstorm, etc. It is the thing that caused the loss.
Policies for homes have different forms. The "form" indicates what perils are typically covered by the policy. The forms are Basic, Broad and Special.
BASIC FORM POLICY
A Basic form policy can cover just Fire or it can also include Extended Coverage. The perils inured against are generally; fire, lightning, explosion, smoke, windstorm, hail, riot, civil commotion, aircraft, vehicles, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. A DP1 and HO1 are examples of polices that use Basic form coverage.
BROAD FORM POLICY
A Broad form policy covers a little bit better by adding some perils to the Basic form above; the perils added to the Basic form are falling objects; weight of snow, ice, or sleet; water damage (in the form of leakage from appliances); and collapse from specified causes. A DP2, HO2 and HO8 are examples of policies that use Broad form coverage.
Both the Basic and Broad forms are called "Named peril" policies because they specifically list out the perils insured against.
SPECIAL FORM POLICY
Instead of being a named peril policy like the two forms above, a Special form includes coverage for everything EXCEPT for what is specifically excluded from coverage. Some typical exclusions are Earthquake, Flood, Normal wear and tear, Rot, Mold and intentional damage; to name a few. A DP3 and HO3 are examples of policies that use the Special form.
KINDS OF POLICIES
There are two different kinds of policies that you can purchase; the first is called a Homeowners policy (HO) and the second is called a Dwelling policy (DP). Both of these have there own unique place in Insuring homes.
A Homeowners policy is generally better suited for homeowners because they include additional coverages designed to help protect the homeowner such as Replacement Cost coverage on the home, premises Liability, Medical payment coverage and other coverages such as credit card/check forgery coverage, food spoilage coverage and Identity theft coverage, just to name a few possible ones. Homeowners policies are also usually a Special form policy which affords the best coverage available under policies for homes; however they do come in Basic (HO1) and Broad form (HO2) as well.
A Dwelling policy is focused more on Insuring just the property and doesn't include the additional coverages for the homeowner. This can help to reduce the overall cost of the policy by not charging for coverages that are not needed or wanted. Many can be customized to cover just the home or include additional things such as Replacement cost coverage, contents coverage, adjacent building, premises Liability, etc..
*** SPECIAL NOTE ABOUT BUYING INSURANCE FOR A HOME ***
As you can see, polices for homes can vary considerably! Always look beyond the price and the coverage amounts and ask what kind of policy it is (Homeowners or Dwelling), and what Form (Basic, Broad or Special) the policy you are purchasing is! In my 30+ years as an Insurance Agent I have gained far too many clients from other Agencies that didn't explain what kind of policy they were selling!
GENERAL GUIDLINE OF POLICY TYPES
I'd like to leave you with a general outline of the different types of policies that can be purchased to insure a home.
I hope you have found this brief out line helpful. If you have any questions or concerns about your current coverage, feel free to contact us.