Question

List the four coverages found in Section 1 of the HO. Give an example of a loss covered by each section

Answer 1

Section I:- The following are a list of coverages

Property Coverage:- The initial section of Section I of the standard homeowner's insurance policy simply clarifies what is and what is not covered by the insurance carrier. It summarizes the type of property coverage, the covered causes of loss (i.e. lightning, fire, windstorm), and lists exclusions to coverage. Additionally, the policy will usually detail the conditions that must be met in order for coverage to apply.

Property coverage is generally broken out into five sections:

Dwelling coverage:- This outlines the amount the insurance carrier will pay to repair damage to or rebuild the house itself. This amount does not reflect the purchase price or market value of the home. This coverage should reflect replacement cost value or the amount that’s needed to rebuild your house in the event that it is damaged or destroyed by a covered peril. As a licensed agent, you may need to work with the carrier to determine the appraised value or work with an appraiser who can do this.

Other structures coverage:- Other structures, as defined by the typical HO policy, are the buildings not attached to the house itself, or connected only by a fence or utility line. Other structures usually include sheds, detached garages, gazebos, and fences. Limits of insurance for other structures coverage is based on a percentage (usually 10%) of dwelling coverage.

Personal property coverage:- The contents of the home, like clothes, furniture, and appliances are considered personal property for the purposes of a homeowner's policy. This coverage also applies to personal belongings away from the premises and may include sub-limits for things like jewelry and sports equipment.