Homeowners and Dwelling Policy Coverages
Forms and the coverage ladder
Homeowners forms: HO-2 broad, HO-3 special, HO-5 comprehensive, HO-4 renters (contents only, no Coverage A), HO-6 condominium unit owners (building elements within the unit plus contents), HO-8 modified for older homes using functional replacement cost. Limits run off Coverage A: B other structures 10%, C personal property 50%, D loss of use 30%, plus E personal liability ($100,000) and F medical payments to others ($1,000).
Section I special limits matter: money about $200, securities about $1,500, theft of jewelry and furs about $1,500, theft of firearms about $2,500, theft of silverware about $2,500, business property about $2,500 on premises and $500 off premises.
Dwelling policies (DP-1 basic with extended coverage, DP-2 broad, DP-3 special) insure a dwelling that is not owner-occupied, such as a rented house or a home under construction, at lower limits than homeowners forms.
Exclusions worth memorizing
Earth movement, water damage (flood, sewer backup unless endorsed), neglect, intentional loss, ordinance or law, and business use. Section II excludes intentional acts, business liability, and use of motor vehicles or watercraft.
Traps
Assuming a rental dwelling fits a homeowners form - 'residence premises' means the insured's 1-4 family dwelling; thinking off-premises jewelry theft is fully covered; applying the property deductible to Coverage F.
Worked example
Replacement cost on Coverage A requires insuring to 80% of the dwelling's replacement cost. On a $300,000 home the requirement is $240,000; carrying $180,000 with a $60,000 loss pays 60,000 x 180/240 = $45,000.