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Homeowners Insurance FAQs

What are the different types of Florida homeowners or property insurance?

Homeowners Insurance from Carpenter Insurance, Inc.There are several different types of Florida home insurance policies.  Be sure to review our article on the difference between “Named” & “Open” peril policies to better understand the differences between these standardized policies.

While standardization has greatly improved access to quality homeowner’s insurance, and has made comparing insurance quotes much more straightforward, there are still significant differences among policies. It is very important to understand exactly what is being offered to you and to request several quotes to make sure you are only buying insurance that would benefit you.

We highly recommend you discussing your home insurance needs with one of our licenses home insurance experts to identify which coverage is right for you and then find the best price from the 20 plus home insurance companies we represent.

Standardized Homeowners Insurance Policies

  • HO-1 – Basic homeowners policy.  Covers your house and possessions against 10 different perils.  HO-1 policies have been discontinued in most states.
  • HO-2 – Broad homeowners policy.  Covers house and contents against 16 perils, which are named in the policy.
  • HO-3 – Special form homeowners policy.  Covers the structure for all perils except those specifically excluded by the policy.  Contents are covered against perils named in the policy.
  • HO-4 – Renters insurance policy.  Covers contents for 16 named perils and includes liability coverage. It does not insure the dwelling itself.  Also includes liability coverage for the renter.
  • HO-5 – Premier homeowners policy:  Generally offered to newer, high-end homes that are well-maintained.  Much like the HO-3 policy but contents are covered against all perils except those specifically excluded.  According to the Insurance Information Institute, in some cases, depending the year of construction, the area where you live, your claims history, and other rating factors, you can buy an HO-5 for about the same cost as a traditional HO-3.
  • HO-6 – Insurance for owners of co-ops or condominiums.  Provides personal property coverage, liability coverage and specific coverage of improvements to the owner’s unit. Insurance provided by the owner’s association normally covers most of the actual structure.
  • HO-8 – Policy for older homes.  Covers the same perils as HO-2 but pays only for repair costs or actual cash value, since replacement cost could make the policy costly.  Well-suited for older homes whose market value is considerably less than the cost to rebuild them.

Classes of Homeowners Insurance

For each policy, there are typically 5 to 6 classifications of coverage. These are based on standard Insurance Services Office or American Association of Insurance Services forms. The first four classes –  A, B, C and D; relate to property insurance. The last two classes (E and F) are for liability insurance.

  1. Coverage A – Dwelling: This insures the value of the dwelling itself, though it does not insure the land the dwelling is on. In order to guard against inflation and fluctuation in the cost of replacing the dwelling, a coinsurance clause is generally inserted that provides for full replacement (up to policy limits) as long as insurance has been purchased for up to 80% of the cost of the dwelling.
  2. Coverage B – Other Structures: This insurance covers damage to other structures on the property as long as they are not related to business. The default insurance policy limits for other structures are normally limited to a percentage of the main dwelling (between ten and twenty percent).  However, additional coverage can be purchased using a rider (otherwise known as an endorsement).
  3. Coverage C – Personal Property: Insurance for personal possessions that are located on the property (coverage may extend off the property in certain situations). The coverage is against theft or damage, but there are loss limits on certain types of personal property, such as cash or jewelry. Specific riders can be purchased to expand coverage in these areas. Many insurance companies tie the liability associated with Coverage C to that of Coverage A. Depending on your situation (the relative value of your dwelling to your personal property), this may be more or less coverage than desired.
  4. Coverage D – Loss of Use: Additional Living Expenses: Reimburses the policyholder for living expenses that are associated with a loss event that prohibits the policyholder from living in the dwelling. In other words, if you are unable to live in your home, Coverage D reimburses you for the cost of alternate accommodations. This insurance may also cover loss of income from a rental property.
  5. Coverage E – Personal Liability: This insurance covers homeowners from loss in the event that you are found to be legally responsible for an injury to others. This coverage generally extends to accidental injuries and does not apply to intentional actions. The coverage may include legal defense fees and damages, but will vary by policy.
  6. Coverage F – Medical Payments to Others: As with personal injury insurance, this covers you against medical liabilities resulting from accidental injury where you are found legally responsible. However, this insurance does not apply to the policyholder or residents (those events fall into the category of health insurance). Accidental injury related to business activities are generally not covered by this insurance either.

Additional Coverage

There are numerous other insurance features that can be purchases as part of a homeowner’s insurance policy, including damage to landscaping, removal of debris from storms, identity theft, loss assessments, etc. It is generally a good idea to settle on a level of A through C Coverage levels, compare insurance quotes to find the most affordable policy with a provider you trust and then price out the additional features.

Exclusions

Any items that are specifically excluded from an open perils policy will be listed in the Exclusions section of the policy. Any event can be excluded, but the most common include events such as wars, nuclear hazards, intentional damage or destruction and earth movements.

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