You Had Better Know
This Info
HOMEOWNERS A ( HO-A )
This policy covers only named perils – fire,
lightning, hail, explosions, aircraft and vehicles, vandalism,
smoke, theft, riot and civil commotion.
HO-A is an actual cash value policy. Homeowners
are reimbursed for the replacement cost minus the deductible and
depreciation (in other words, what the covered items are worth
today). For a higher premium, some companies offer an upgraded
HO-A policy with replacement cost coverage for the dwelling.
HOMEOWNERS
B (HO-B)
This policy protects the house and other structures on the
property against all perils except those specifically
named. Covered perils include fire, lightning, hail, falling
objects, windstorms, explosions, vandalism, theft, freezing
pipes and damage from out-of-control vehicles. It also covers
accidental water damage and damage caused by a water leak under
a slab foundation. Floods and earthquakes are among the perils
not covered.
The standard HO-B policy covers the replacement cost
of the home only. Homeowners are reimbursed for the full cost of
replacing the loss, minus the deductible. The actual cash value
of personal property is covered for named perils only.
Homeowners can add an endorsement to their HO-B policy that will
cover the replacement of personal property.
Beginning Jan.1, 2003, only the modified version of the HO-B
policy will be sold. The modified HO-B policy limits water
damage losses and excludes testing, treating and disposing of
mold, although additional coverage may be purchased.
HOMEOWNERS
C (HO-C)
This policy is similar to HO-B but covers personal property for
all perils. Because of its higher cost, fewer consumers purchase
HO-C.
