What is Homeowners Insurance?

Massachusetts residents have a lot invested in their homes. Very few families could financially recover if something ever happened to their most important asset, their residence.  However, Homeowners insurance not only protects their property, but it also provides residents with personal liability as well.

What is Covered Under a Homeowners Policy?

There are two sections to a Homeowners policy. Section One covers Property, while Section Two covers and Personal Liability.

  • Coverage A, provides a limited amount property coverage to owner-occupied dwellings.  The coverage limit provided is based on the cost to replace a dwelling.
  • Coverage B, provides coverage to other structures detached from the dwelling.  This automatically covers 10% of the determined limit of Coverage A
  • Coverage C, protects against all of the unscheduled personal property of an insured while located in any part of the world. The insured’s unscheduled personal property is covered by all perils listed on the broad form policy. Coverage C automatically covers 50% of Coverage A limits.
  • Coverage D, protects against loss of use. This coverage is automatically 20% of Coverage A limits to pay for additional living expenses to reside at another location due to a covered loss.
  • Coverage E, covers against legal suits resulting from Property Damage or Bodily Injury to others. Initially, this part covers up to $100,000, but can be increased.

Coverage parts A through D are all covered under Section One of the Homeowners policy, while Coverage E is covered under Section Two of the Homeowners Policy.

Endorsements can be purchased to also cover Business Pursuits, Inflation Guard, Expanded Home Daycare, Personal Injury, Scheduled Property, Identity Fraud Expense and Guaranteed Replacement Cost of a Dwelling protections among many other endorsements available.  Ask on of our Personal Lines Agents for more information about the endorsements listed above, and even more endorsements that can enhance your Homeowner policy coverage.

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What Types of Dwellings Are Covered by Home Insurance?

Massachusetts’s residents live in many different housing situations, and insurers offer a range of home insurance policies. These policies are often identified by an abbreviation that’s standardized throughout the industry, “HO” and are written for owner-occupied dwellings.  The following are types of homeowner’s policies:

  • HO-1 Basic Form Policy, is designed to protect a dwelling from 10 named perils.  However, the HO-1 policy is uncommon due how HO policies have evolved over the decades
  • HO-2 Broad Form Policy, is a more common form of homeowners policy that protects dwellings from 16 named perils, as well as providing personal liability
  • HO-3 Special Form Policy, is the most common form of homeowner’s policy and is referred to as an open peril policy.  HO-3 policies aren’t limited to named peril coverage, but they protect dwellings from all perils except those that are explicitly excluded
  • HO-4 Tenants Form Policy, is designed specifically to protect renters personal belongings and personal liability
  • HO-5 Comprehensive Form Policy, is an open peril policy that is nearly identical to the HO-3 policy but the HO-5 policy extends open peril coverage to personal property as well as the dwelling
  • HO-6 Condo Policy, which limits dwelling coverage within an individual condominium unit, but also provides protection for personal belongings and personal liability

Although there are several variations of the Homeowners policy, each of these policies can often be adapted for a particular policyholder’s needs by purchasing endorsements. Work directly with one of our agents to help determine which HO policy form and build a policy that best fits your unique needs

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What is Dwelling Fire Coverage?

Dwelling fire coverage is coverage designed for residential properties, but is not restricted to owner-occupied residence.  Similar to HO polices, Dwelling fire policies offer a Dwelling Property Basic Form, Dwelling Property Broad form and a Dwelling Property Special Form policies.  Dwelling fire policies are abbreviated as “DP” forms within the industry.

  • Dwelling Property Basic form, is designed specifically against the peril of fire.  Therefore, it provides limited coverage for a dwelling loss caused by fire, lightning or an explosion.  This form is often referred to as a DP-1 policy.  Eight additional peril coverage types can be added such as hail or windstorm, aircraft, riot, vehicle damage or smoke damage.
  • Dwelling Property Broad form, also a named peril form that covers additional peril types from the basic form, but this form also adds coverage that extends protections to also cover against replacement cost and additional living expenses.  This is typical referred to as a DP-2 form.
  • Dwelling Property Special form, also covers replacement cost and additional living expense coverage, but structural and personal property losses are covered on an open-peril basis.  This means the structural losses are covered by all perils unless specifically excluded on the policy.  This provides the most comprehensive policy to maximize coverage as well as types of losses covered, and are often referred to as the DP-3 form.

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What is the Difference Between Apartment Insurance and Condo Insurance?

Apartment Insurance and Condo Insurance policies both provide personal property coverage and personal liability coverage. They differ in the structural coverage they provide. As mentioned, apartment policies typically do not provide structural coverage.  Condo policies frequently have structural coverages for the features inside a condominium. For example, a condo units cabinets, built-in bookshelves and hardwood floors might be covered by a policy depending on the policy’s terms and conditions. Common structures, including exterior building walls and walls between units, are normally covered by a Condo Association’s Master policy rather than a Condo Owner’s Personal policy.

How Can Massachusetts Residents Purchase Homeowners Insurance?

With several different Homeowners Insurance policies, finding a policy that provides the best coverage for your family requires in-depth research and intimate knowledge of the subject. For help selecting the correct policy type and comparing the rates, contact our Independent Personal Lines Insurance Agents who are familiar with all forms of Homeowners Insurance. By comparing carrier rates, our agents can find the most comprehensive policy offered at the lowest rate!

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