Did you know that not all property policies are the same?  Selecting the most appropriate property policy requires more than just comparing Dec pages or coverage limits.  There are different policy forms and endorsements that make up a policy and most people have no idea what they are carrying.  Only an educated agent can help explain these options to you. Check your policy to see what type of form it is written on and what type of endorsements are adding coverage or taking it away.  If you own the wrong type of insurance policy, a routine claim could turn into a financial nightmare.  Look at for these:

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HOA: Basic Named Perils Policy

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The HOA Home Policy is the most basic and simple home insurance protection. It is the equivalent to the HO1 policy outside of Texas. The HOA policy will only protect you from 10 specific perils. (A peril is an event or disaster that causes a loss or damage to your home or property. A few of the most common perils are fire, theft, wind, and hail.) If something happens to your home other than these ten perils, you are not covered under the HOA. The ten perils are:

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• Fire or Lightning

• Windstorm or Hail

• Explosion

• Riot or Civil Commotion

• Aircraft

• Vehicles (unless caused by the insured)

• Smoke

• Vandalism or Malicious Mischief

• Theft (limit of liability on HOA is usually $1,000)

• Volcanic Eruption

 

HOA+: Broad Named Perils Policy

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The HOA+ Home Policy provides broader coverage than the HOA policy. It is equivalent to the HO2 policy in most states. Like the HOA, the HOA+ still lists every peril you are protected from, but the list adds six more perils. This protection covers your dwelling and your personal property. The sixteen perils are:

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• Fire or Lightning

• Windstorm or Hail

• Explosion

• Riot or Civil Commotion

• Aircraft

• Vehicles (unless caused by the insured)

• Smoke

• Vandalism or Malicious Mischief

• Theft (limit of liability on HOA is usually $1,000)

• Volcanic Eruption

• Falling Objects

• Weight of Ice, Snow, or Sleet

• Accidental Discharge or Overflow of Water or Stream

• Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging

• Freezing

• Sudden & Accidental Damage from Artificially Generated Electric Current

 

HOB: Basic Open Perils Policy

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The HOB Home Policy is referred to as an open perils policy. That means instead of specifically listing the only perils you are protected from like the HOA or the HOA+, the HOB lists the perils your policy will not cover. If a peril isn't listed as being excluded, your home is protected. HOB home protection is much broader than HOA or HOA+ coverage. This open perils coverage only applies to the home. The HOB is most similar to the HO3 policy, but is slightly better because it typically includes additional water damage protection that an HO3 doesn't. With the HOB, your contents are protected from the same 16 perils that are listed in the HOA+ policy. The exclusions to the dwelling protection are listed below.

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• Earth Movement

• Ordinance or Law (some coverage may be provided in your policy)

• Water Damage (some coverage provided in your HOB policy)

• Power Failure

• Neglect

• War

• Nuclear Hazard

• Intentional Loss

• Government Action

• Mechanical Breakdown

• Collapse (some coverage may be provided in your policy)

• Mold, Fungus, or Wet Rot (some coverage may be provided in your policy)

• Smog, Rust, & Corrosion

• Smoke from Agricultural Smudging & Industrial Operations

• Dispersal, Discharge, Seepage of Pollutants

• Animals own by Insured

• Birds, Vermin, Rodents, Insects

• Wear & Tear, Deterioration

• Settling, Shrinking, Bulging, or Expanding (of bulkheads, foundations, pavement, patios, footings, floors, roofs, ceilings)

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If something happens to your home that is not specifically listed as one of the above exclusions, it is covered under the HOB policy. The HOA+ and the HOB are the two most common Texas home insurance policies.

 

HOC: Full Open Perils Policy

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The HOC Home Policy is full open perils on both the dwelling and contents. This means that your home is covered for anything and everything that could possibly happen to it, minus the same exclusions listed above in the HOB policy. The only significant difference between the HOC and the HOB is that the HOC will cover your contents for open perils, while the HOB covers your contents for the 16 perils listed above in the HOA+ policy. The HOC policy most closely resembles the HO5.

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You can easily see how if you currently carry a policy with the form HOB and an agent offers you an HOA, of course the premium will be cheaper on the HOA, but does this really benefit you at claim time?  Your agent can help walk you through what your current policy covers as well as any additional options that you may have.  Reach out to us to set up an appointment and review your coverage to make sure your property is properly protected.  

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