The coverage you have depends upon the type of policy you have. Unlike auto insurance, where the policies are pretty much the same, homeowners policies can be quite different, depending on the “form” number. The most common types of homeowner policies are:
All homeowner policies are “package” policies. You get a group of coverages packaged into your policy for one overall premium. They include coverage on your building, your contents (furniture, clothing, etc.) and liability insurance in case you are sued, under the same policy.
The HO3 policy is, by far, the most commonly sold policy. It covers everything the HO2 policy covers and more. Instead of listing the perils that are covered these policies cover all damage to the building except what is excluded. The usual exclusions are: wear and tear, termites, rotting, collapse of septic tank, flood, war, earthquake and a few others.
Most policies cover your contents or belongings only for the perils named in an HO2 policy so wear and tear and normal breakage is not covered for your furniture and personal belongings.
Keep in mind your policy probably has limits on certain items. Typical limits are:
Check your policy carefully. If you see you don’t have enough coverage, find out how much it would cost to increase those limits or to buy special coverage.
DP3 Rental Home Insurance Policy
The DP3 insurance policy is considered the best insurance policy for rentals in the United States. It is often referred to as the Dwelling Fire Form 3 or DP-3 insurance. It provides excellent coverage for Landlords who are looking to get excellent insurance for their rental properties.
Dwelling fire insurance policies come in two different policy categories; named peril policies and open peril policies. The DP 1 and DP 2 are named peril policies, while the DP 3 is an open peril policy. Named peril insurance policies are policies that specifically list the perils that are insured under the policy. Open peril policies, on the other hand, are insurance policies that cover all possible perils, with the exception of a small list of perils excluded from the policy.
The following perils are the most common perils that are excluded from DP-3 insurance coverage:
Although this list contains the most common perils not insured in a standard DP3 insurance policy, make sure to check with your agent and policy for any additional exclusions.
Insurance policies are either replacement cost insurance or actual cash value insurance. Actual cash value (ACV) policies typically don’t insure dwellings in full because depreciation is deducted from the amount of money you can receive for a claim. If your home is old, then depreciation on the materials can prevent you from receiving thousands of dollars on your claim.
Fortunately, DP 3 insurance is replacement cost insurance. This means regardless how old your home is, your dwelling will be repaired in full to the amount of your coverage without any costs out of pocket besides your home insurance deductible.
Homeowners insurance does not cover floods! Again, your homeowners policy will not cover you in the event that you suffer a loss from rising water. Even a few inches of water can cause serious damage – resulting in thousands of dollars in repair and restoration costs.
A flood insurance policy provides protection for destruction and financial devastation caused by floods. Although it may not seem as necessary as homeowners insurance, you want to have additional coverage to keep your home safe and your possessions secure with flood insurance. Flood policies offer protection against losses that result from heavy and lengthy rain falls, storm surges, blocked storm drainage systems, snow melts, etc.
Different types of policies are available based on your property’s location and flood history:
If you live in a community that participates in the National Flood Insurance Program (NFIP), your building and its contents can be covered by a standard flood insurance policy. The NFIP was established by the Federal Government to help communities who “voluntarily participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage.” To be considered a flood, the waters must cover at least two acres or affect at least two properties. You must apply for building coverage and contents coverage separately if you choose to invest in standard flood insurance. Florida has major risk areas for flooding, you have to be prepared if you reside in one of these areas. Our experts at Evergreen can help you determine if you should be protected with a flood insurance policy.
Preferred Risk Flood Insurance Policies
If your home or business is in a low or moderate risk zone, your building may qualify for a low-cost preferred risk policy. While you aren’t required to purchase flood insurance in low-to-moderate risk areas, a preferred risk policy will protect your home and its contents if you are affected by a small flood or a larger flood that has extended into your low-risk area. In truth, many flood insurance claims occur in low-to-moderate risk areas.
Don’t wait until it’s too late. Contact Evergreen Insurance and one of our experts will let you know your Flood Zone Determination (at no charge) and what programs are available to you.