An HO-3, or special form policy, is the most common type of homeowners insurance policy on the market and represents the vast majority of single-family home policies. HO-3 provides comprehensive coverage for your home and covers your personal property against hazards of the same name in the HO-1 and HO-2 policies. Technically, an HO-4 is not a “homeowner” policy, since tenants don't own their homes, so this type of policy excludes coverage of the building structure. Still, knowing what types of problems may arise helps homeowners prepare financially, emotionally and physically for these events.
A policy form represents the type of property insurance needed by a homeowner, condo owner, or renter. As the most common causes of homeowners insurance claims, wind and hail account for 45.5% of claims. HO-1 policies offer the most limited home insurance coverage, which is limited to a specific list of 11 named hazards. Sometimes, a condominium association is only responsible for the building's common areas, landscaping and bare walls, floor and ceiling.
You should get an idea of how much homeowners insurance costs in your area by researching and getting several quotes. However, condominium owners are not always responsible for common areas outside their unit, which are often covered by their homeowners association. Knowing if you have sufficient homeowners insurance coverage is important and can help you feel prepared if an event requires you to file a claim. While homeowners can expect their policies to cover these high costs, it's important to be aware of the type of damage that can occur.
They generally all have a combination of commercial property insurance against hazards; liability coverage for accidents, errors and common property injuries; and insurance against commercial crimes in the event of vandalism, theft, or dishonesty of board members. Homeowners insurance should cover the costs of rebuilding, as well as the cost of replacing lost or damaged personal belongings. Because condominium residents only own their unit, and not the entire building, the condominium association generally has its own insurance policy that protects common areas, grounds, and external parts of the building. Liability coverage is an important part of homeowners and renters insurance and protects the insured from potentially catastrophic financial burdens.
The HO-3, which is sometimes referred to as an extended or special home insurance policy form, covers almost any hazard, except those specifically excluded (such as earthquakes, floods, landslides or mudslides, nuclear accidents, and sinks). Miscellaneous other property damage and claims related to financial incidents represent a good number of homeowners insurance claims.