Property and Casualty Coverages
Homeowners
HO-3 covers the dwelling on an open peril basis and personal property on a named peril basis; HO-5 is open peril on both; HO-2 is broad named peril. Coverages are A dwelling, B other structures (commonly 10% of A), C personal property, D loss of use, E liability, F medical payments. Additional coverages such as debris removal are built in; endorsements modify them. Core exclusions: flood and surface water, earth movement, ordinance or law, neglect, intentional loss, and business pursuits.
Commercial and auto
Commercial property uses causes of loss forms (basic, broad, special) with coinsurance and business income measured by the period of restoration. Auto policies combine liability, medical payments, uninsured/underinsured motorist, and physical damage split into collision versus other than collision. North Carolina sets its own mandatory liability minimums, UM requirements, and policy form.
Traps
- Water entering through a wind-opened roof is often covered; rising water is not. Read the exclusion's lead-in language.
- Animal strikes usually fall under other than collision, not collision.
- Business income ends at the period of restoration; extended periods need an endorsement.
- The sudden and accidental and your work exclusions decide many liability claims.
Worked example
An HO-3 with Coverage A of $400,000 (80% requirement satisfied) on replacement cost. Fire damage: replacement cost $200,000, ACV $150,000. The insurer pays $150,000 initially, holds back $50,000, and releases the holdback once repairs are complete and invoiced - never exceeding the Coverage A limit.