What is a Special HO3 Homeowners Insurance Policy?

Why do I need HO-3 protection? And what does an HO-3 policy cover?

You need HO-3 protection for:
Coverage for your home, belongings, and personal liability
Insures your home against natural disasters and other perils, like theft and fire.
Coverage against unexpected injuries that may occur throughout your lifetime.
A safety net against expensive repairs or replacements.

Because of its multiple levels of protection, lenders will almost always require HO-3 coverage when applying for a mortgage as it protects you and your lender’s financial investment.

Before signing any policy, you should understand the nuances of each policy and the applicable types of coverage you are purchasing. You need to know how each coverage is different to protect your home against every feasible type of damage that may occur.

An HO-3 policy covers two types of property damage—open perils, known as all risks, for your home and detached structures. The second class is named perils which covers your belongings. The open perils coverage covers your home and other structures against any perils except those excluded by the policy. With named perils coverage, they protect your property against 16 perils.
When it comes to what’s protected, there are two types of coverage, HO-3 and H0-1/H0-2. HO-3 offers “all-risk protection”, which covers everything typical of homeowner’s insurance, save for what’s specifically excluded. HO-1/HO-2, however, covers the property for specified perils shown in the policy.

Depending on your provider, you may have the option to add virtual maintenance services or innovative home kits to your policy. This allows for certain discounts under specific stipulations, like if you commit to use green appliances or install protective intelligent home devices in your home.

Does H0-3 Cover Flood Damage?
Be aware that no home insurance of any kind will cover flood damage. Even after a major storm, any flood damage that occurs remains a personal expense. If you live in Florida in an area with high flood risk, you should consider purchasing a separate Florida flood insurance policy.

Homeowners’ policies include HO-3 coverage, but policyholders should carefully review their policy to determine exactly what is covered and whether or not any exclusions, limitations, or endorsements modify or entirely remove any coverages afforded in the policy. Now let’s examine how the H03 homeowner’s insurance policy works.

Below, you will find standard homeowners’ insurance coverages and the typical reimbursement limits for each component:

Coverage  The Purpose of the CoverageInsured Coverage Limit
Part 1- Property Coverage:
Coverage A – DwellingsIncludes coverage for your home’s structure and built-in appliancesThe cost of replacing the home
Coverage B – Your Other StructuresThey cover your detached structures10% of the dwelling limit
Coverage C – Personal PropertyProtects your belongings both indoors and outdoors50% of the dwelling limit
Coverage D – Loss-of-useCovers additional living expenses incurred during a home repair20% of the dwelling limit
Added coverageThis section explains all the additional coverages in a standard property insurance policy, such as debris removal, loss assessment, and ordinances or laws, along with their insured limitsDepending on the coverage
Part 2  – Liability Coverages
Coverage E – Personal LiabilityIt covers legal and medical bills if you cause injury or damage to someone else’s property$100,000 -$500,000
Coverage F- Paying for others’ medical careThe insurance covers medical bills for your guests no matter who is responsible for their injuries$1,000-$5,000

What to Think About When Buying HO-3 Homeowners Insurance?

The only disadvantage of an HO-3 policy is the lack of named peril coverage for your personal property. This exposes your belongings and places the burden of proof on you in the event of a claim. Keep in mind that home insurance companies’ coverage options and pricing may vary. When looking for HO-3 coverage—or any coverage—it is always a good idea to shop around.

Get Yourself Covered
It is unknown when the peak of a natural disaster will occur except for hurricane seasons or monsoons; and with climate change affecting weather patterns and intensity, hurricane season could become more unpredictable. Florida Disasters in all forms—natural or artificial—leave you devastated and lost. Did you know most individuals own at least 24 pieces of valuable electronics in their homes? How much emergency cash do you have stashed under the mattress? How about your jewelry? Burglars would have a payday if they visited your home.

The first step in protecting yourself from disaster is protecting yourself with an HO3 Homeowners insurance policy.