Homeowner's Policies (HO-2)
Information regarding policies. HO Section 1 consists of four sections.
They're called "A through D" and "Additional coverage."
Section 1 tells the insured what property is covered and other damages
are not covered.
Coverage A refers to the insured's residence premises indicated on
the documents. A second home or summer cottage can be called a temporary
residence is not protected as it does not appear in the Declarations.
Coverage B refers to other housing structures separated from the home by
a clear area. Unattached garage or shed equipment are examples of property
protected in this section.
Coverage C refers to the insured's personal property worldwide—the
policy details unique restrictions on certain land.
Often the question arises whether an object is a real or personal property.
If it's real property, it's covered under Coverage A; if it's
unique, it's protected under Coverage C. Under English common law,
everything permanently attached to land is real property
The Special Responsibility Limits passage sets maximum dollar sums that
can be recovered when the particular property is lost. In some instances,
the limits apply only to peril or robbery loss; in other cases, any loss
is subject to the defined limits.
Unique responsibility limitations.
These limitations do not expand liability cap Coverage C. The particular
threshold for each numbered category below is the cumulative threshold
for each loss in that category.
- $200 for banknotes, bullion, gold other than gold, silver other than silverware,
platinum, coins, and medals.
- $1000 on shares, accounts, debt, credit letters, documents, documents,
manuscripts, passports, tickets, and stamps.
- $1 000 for watercraft, including trailers, machinery, and outboard motors.
- $1000 on non-watercraft trucks.
- $1000 Gravemarkers.
- $1000 for theft of jewelry, watches, furs, semi-precious stones.
- $2000 Gun theft loss.
- $2500 for theft of silverware, silver-plated glass, gold-plated glass,
and pewterware. This includes flatware, hollowware, tea sets, trays, and
silver, gold, or pewter trophies.
- $2500 for personal property, off-premises used at any time or for any reason.
- $250 for personal property, not used at any time, or for any business purpose.
Some property is excluded from coverage, including the following:
Personal property insured elsewhere, such as in a floater.
Animals, birds, fish.
Vehicles and supplies.
The property that is associated with renting an apartment.
Other types of coverages that can be excluded
- Recovered debris disposal costs.
- Expenses incurred to protect property from further damage can be covered.
- Specialty coverage is required to damage trees and shrubs.
- Fire department charges will be reimbursed.
- The property was removed from the residence because it was endangered and
subsequently damaged or from a removal site and then stolen.
- Credit card fraud and related fraud are protected.
- Limited amounts.
- Specific assessments of the form of cooperative buildings can be paid up
to a $1000 limit.
PERILS INSURED AGAINST (HO-2)
Property insurance plans take one of two simple formats: (1) they may define
the risks that may result in an insured loss, or (2) they may have comprehensive
or open coverage and define the exclusions that apply. Previously, insurers
now avoid used word, coverage of 'all risks,' since no insurance
policy covers all potential losses.
For the same cause, the word "comprehensive coverage" is now evaded.
Fire or lightning
"Fire" means a hostile fire, not in its proper location. "Lightning"
is an intense electricity discharge. Direct losses from lightning are
often challenging to prove significantly when only TV sets and other appliances
HO-2 protects against tornadoes and all other forms of violent wind destruction.
The coverage excludes damage to the buildings or contents inside if the
building's exterior first does not suffer damage.
An explosion is a difficult concept to describe, and legislation does not
define the term. Fire or loud noise can follow an explosion. Gas can be
contained under pressure. For example, when a combination of these events
causes damage when a furnace blows up, HO-2 covers the event's damage.
Riot or commotion
War, civil war, and rebellion are not contained, but fewer hostilities.
Possibly courts and insurers would have to handle the question of terrorist attacks.
Aircraft damage involves damage caused by a house-missing spacecraft. HO-2
(but not HO-3) removes losses to gates, driveways, and walks from vehicles
driven by a house occupant.
Sudden and unintended smoke
This clause may cover smoke damage caused by a smoldering electric blanket,
as may damage resulting from defective cooking appliances. If firefighters
cause water damage by exposing the smoldering, this would be shielded
as the smoldering blanket or stove would be the proximate cause of the loss.
Vandalism or mischief.
If others knowingly and deliberately destroy the homeowner's property,
coverage under the HO-2 contract is suspended if the house has been vacated
thirty days before the loss. Vacant means the household insured and their
belongings are missing. If an insured takes a holiday with plans to return
home, the house is "unoccupied" rather than empty, and the policy
Theft is the act of taking property without the owner's permission.
Theft usually does not entail fraud losses or unexplained property disappearance.
Three fraud coverage exclusions are in the HO, including insured fraud.
Additional limitations apply if the theft happens outside the home, whether
in a dorm or an apartment.
Glass breakage is a result, not a failure. That's extensive coverage.
Any danger shattering structural glass (part of the building) causes an
Before internal damage is covered, the building must suffer external damage.
If a tree branch were to fall and crash through the roof, the roof would
be covered with damaged contents.
Snow, ice, or sleet weight
Accidental damage from plumbing
Losses to pipes, machinery, sprinklers, or air conditioners are not protected.
Only the damages arising from these units are insured. However, damage
caused by slow and frequent leaks is excluded, as is damage incurred if
the building is empty more than thirty consecutive days before loss.
The sudden destruction of heaters, air conditioners, or sprinklers
The provision covers these units' explosion, but freezing damages are
If the building is occupied or if the building is unoccupied, as long as
there is a serious attempt to heat it and frozen pipes that burst cause
damage, HO-2 offers coverage.
Sudden damage from artificially-generated electricity
Electrical appliances are protected, except for damage to tubes, transistors,
and similar sections. There is coverage if a power surge is sent through
the electric lines, and a motor burns out. Short-circuit damage can also
often be shielded.
Damage from an eruption, lava flow, or volcanic ash will be covered; earthquake
damage is excluded.
Mount St. Helen's eruption raised some concerns about HO insurance coverage.
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