Property Insurance Basics
The homeowners menu
HO-2 (broad named perils on both), HO-3 (open peril on the dwelling, named peril on contents), HO-5 (open peril on both), HO-4 (renters), HO-6 (condo, building items and betterments), HO-8 (older homes, functional replacement cost). Coverages A–F: dwelling, other structures, personal property, loss of use, liability, medical payments.
Valuation and coinsurance
ACV is replacement cost minus depreciation; RCV is repair or replace without deduction. Commercial property forms frequently carry an 80% coinsurance clause: if the limit falls below 80% of the value at loss, payment is reduced by did/required, then capped at the limit.
Recurring exclusions
The standard property policy excludes flood and surface water (NFIP or a difference-in-conditions form), earth movement, mold beyond a sublimit (commonly $10,000), wear and tear, and ordinance or law unless endorsed. Special limits cap theft of jewelry, money, silverware and similar items.
Common traps
Confusing a sublimit with an exclusion; ignoring the mortgagee clause (the lender is paid even when the insured's acts bar recovery); treating loss of use as open-ended when it is time-limited (often 12–24 months).
Worked example
Limit $600,000, 80% coinsurance, value at loss $1,000,000, loss $200,000, deductible $2,000. Required limit = $800,000. Did/required = 600/800 = 0.75. Payment = 0.75 × $200,000 = $150,000, less $2,000 = $148,000.