Types of Property and Casualty Policies
Personal lines
Homeowners: HO-2 (broad named perils), HO-3 (special on the dwelling, broad named perils on personal property), HO-5 (comprehensive), HO-4 (tenants - contents and liability, no building), HO-6 (condominium unit-owners), HO-8 (modified form for older homes, functional replacement cost). Dwelling policies (DP-1 basic, DP-2 broad, DP-3 special) insure rental or secondary structures and carry no personal liability unless endorsed. Flood is written through the NFIP and is excluded everywhere else.
Commercial lines
Commercial property with business income/extra expense; BOP for small eligible businesses (business income included, eligibility by class and size); CGL with premises-operations and products-completed operations, written occurrence or claims-made; commercial auto, garage, and trucking forms; inland marine (property in transit, contractors' equipment, valuable papers); crime/employee dishonesty; equipment breakdown; umbrella and excess liability; workers compensation (Part One statutory, Part Two employers liability).
Traps
- Putting a business exposure on a homeowners policy.
- Insuring a tenant with an HO-3 instead of an HO-4.
- Treating an umbrella as primary - it sits above required underlying limits and may self-insure a retention.
- Forgetting a claims-made CGL needs a retroactive date and an extended reporting endorsement.
Worked example
A couple rents an apartment and owns no building; they need contents and personal liability, so HO-4. If they owned the unit in a condominium, HO-6 would fit because the association's master policy covers the building shell.