This isn’t part 2 of a series or anything but enough people inquire about these topics through search that I wanted to offer this information for those who come here via search from the internet.
Edited by author on 6/15/2011:
For whatever reason, this post has been the most popular of all my blogs. Here is my quick synopsis of basic, broad and special form coverage for those who come here via internet search:
Basic coverage, sometimes referred to a HO-A, is the most stripped down version of homeowner insurance coverage available. It includes coverage against damage from windstorm, hurricane and hail in addition to other named perils.
Broad coverage, sometimes called HO-B, takes the basic coverage and adds a few insured perils.
Special form, sometimes called HO-C, is the most comprehensive form and usually includes an open peril coverage, which means coverage is included for everything. UNLESS IT IS SPECIFICALLY EXCLUDED.
I hope this added information is helpful. However, my advice for all insurance consumers is summed up as thus: DO NOT DO IT YOURSELF. There is too much at risk to not know with certainty that you are covered. And trust me when I tell you that coverage varies widely, nearly on a house to house basis. Find an independent insurance agent in your community. Email or call me if you are confused. I am always eager to help. Give me a chance to show you!
END OF AUTHOR’S EDITS
In Texas, Homeowner insurance is limited in several ways. Your policy should have A, B, C, D, E and F limits. Has anyone ever explained to you what that means?
A – The limit of insurance on your physical home – The cost to replace and/or rebuild your home due to catastrophic loss
B – The limit of insurance on “other structures” – Usually includes sheds and other buildings but if you have an unattached garage, this is part of that limit
C – The limit on personal property – Basically everything from the studs in is included in this number, furniture, fixtures and clothing. It seems like a lot of money but you’ll burn through this money fast when you start to think about buying new clothes and furniture, appliances, etc. And you better hope that you have “Replacement Cost” coverage. Because if you don’t you’ll be getting $80 for the $1500 couch you bought 10 years ago.
D – Loss of use – The limit of what will be paid if you are unable to live in your house
E – Personal Liability – Did you know the average liability claim in Harris County, after jury trial, is $270,000?
F – Medical Payments – A coverage that can be used if you are not liable but still want to rectify the damaged parties.
Confusing, isn’t it? Has your agent ever explained this process to you? I bought insurance from different agents for 5 years and never understood any of this until I became an agent myself. I hope you’ll consider how much is at stake the next time you think about insurance because it’s a lot more than saving $100 here and there.
And furthermore, that doesn’t even scratch the surface of whether or not you have a broad form or special form coverage. It can be confusing. Don’t do it yourself, get an agent involved. DO IT!
Call or email if you would like to know more!
Your Independent Insurance Agent
Please remember that if you or your friends ever need any assistance with insurance related questions, I am here to help.