When insurance policies are sold they are issued on either a monoline basis or as a package policy. A monoline policy contains only one type of coverages, such as liability insurance, while a package policy includes several different types of coverage, such as property insurance and liability insurance. A package policy is generally less expensive than insurance coverages purchased separately. Homeowners and tenants policies are package policies that include property, liability, theft and medical payments coverages.
Standard types of insurance coverages on your home or apartment offer protection against the financial loss you might suffer if any of the following events occur:
A. fire, windstorm, hail, tornadoes, vandalism, smoke damage and other physical damage to your home or belongings;
B. theft of your personal property;
C. someone gets injured on your property due to your negligence or that of a member of your family; or somebody else’s property is damaged as a result of your negligence.
The events described in C. above would be covered under the liability portion of your policy.
Several basic types of homeowners and tenants policies are currently sold in New York State. The policies range from a basic package up to more comprehensive packages which, of course, are more expensive, but do provide greater coverage against more perils for both your home and possessions. Five policies provide coverage for owners who occupy one or two family houses; a sixth covers tenants of a house or apartment building or cooperative owners; and a seventh provides coverage for condominium owners.
It is important to be aware of the different perils (causes of loss) that are insured against in each type of policy. We are providing a comparison of the coverage offered under each of the policies described above. It is up to you to determine whether you need the most extensive type of coverage or whether your insurance needs can be met with a basic policy. Some of the coverage excluded under a policy, such as earthquake damage and power interruption, can be "bought back" for an additional premium. Correspondingly, some coverages listed under a policy can be excluded, such as off-premises theft, resulting in a reduction in premium. However, some coverage, such as flood insurance, are always excluded and the only way to obtain them is through Federal insurance programs which will be explained further in this guide. Be advised that some insurers may use trade names for their insurance products and do not label their policy forms as follows:
The Homeowners-1 (HO-1) policy or Basic Policy insures your home and contents against listed perils (see graphics on page 3). Very few insurers sell this policy and most offer more comprehensive policies, such as the Homeowners-3, that include these and other perils.
The Homeowners-2 (HO-2) policy or Broad Form Policy, insures your home and contents against the perils in the HO-1 policy and other additional listed perils such as falling objects; weight of ice, snow and sleet; damage resulting from an accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire sprinkler system.
The following additional perils are covered under an HO-2 Policy:
The Homeowners-3 (HO-3) or Special Form Policy is the most widely used policy by homeowners writers today. It is becoming the standard homeowners policy and many lending institutions recommend buying it. This policy covers your home for all risks of physical loss, except those that are specifically excluded, such as flood, earthquake, war, nuclear accident, etc. Check your policy for a complete listing of the excluded perils. Coverage for loss of your home’s contents is also covered for many of the same perils for which your home is covered.
The Homeowners-5 (HO-5) policy or Comprehensive Form Policy protects your home against the same perils as the HO-3 policy. In addition, your personal possessions would also be covered for all risks of physical loss, except those risks that are specifically excluded. This extra protection may also be provided by purchasing a HO-3 policy with the "Special Personal Property" endorsement.
In addition, the Homeowners-8 (HO-8) or Market Value Policy is a modified version of the HO-1 policy, providing actual cash value coverage in place of replacement cost coverage for a building. In no event will the company’s settlement figure exceed the amount necessary to repair or replace the dwelling. This policy form is generally used when the replacement value of the property exceeds its market value, as in the case of older homes which are considered "white elephants".
Tenants or Cooperative Owners Policies (HO-4) and Condominium Unit Owners Policies (HO-6) are policies that insure against damage to the contents of the apartment, cooperative or condominium and for personal liability of the insured when people are injured or suffer property damage in the insured unit.
It is not necessary for a tenant to insure the building in which he or she lives since that is the landlord’s responsibility. The HO-6 policy does provide property coverage for any alterations, appliances, fixtures and improvements within the insured unit but condominium and cooperative buildings, and their common areas, should be insured through policies issued to the cooperative owners’ and the condominium owners’ associations.
Your homeowners and tenants policies will also reimburse you for increases in living expenses you have to pay when your home becomes uninhabitable because of damage caused by one of the covered perils. You must remember that not all living expenses will be reimbursed, only the difference between your normal living expenses and any additional living expenses. Examples of these types of expenses are hotel bills, restaurant bills, telephone bills, etc.
All of the above homeowners policies insure you for your personal liability when a another person suffers bodily injury or property damage as a result of your negligence or the negligence of anyone who is an insured under your homeowners policy. Generally, you will also be protected if one of your pets injures anyone, however, if you have a dog which is considered a dangerous animal, such as a pit bull, the company may exclude coverage for that pet or write the coverage for an additional premium. This may also be true for exotic pets, such as snakes, spiders, amphibians, etc.
If an incident occurs at your home and someone is injured, your insurer will reimburse you for necessary medical expenses, generally up to a limit of $500 or $1,000. Examples of the types of expenses that would be paid are transportation to a hospital or doctor’s office or a doctor’s bill for necessary first aid. You should check your policy for specific details about this coverage.
