A standard HO-3 policy has six coverage components. Most people only know about one or two.
The structure of your home: walls, roof, built-in appliances, attached garage. Covers the cost to rebuild, not the market value.
Detached garage, fence, shed, swimming pool. Typically 10% of your dwelling coverage automatically.
Furniture, clothing, electronics, appliances. Usually 50–70% of dwelling value. Contents can be ACV or replacement cost.
Hotel, meals, and living expenses while your home is repaired. Usually 20–30% of dwelling coverage.
Covers you if someone is injured on your property or you accidentally damage someone else's property.
Covers medical bills for guests injured on your property — regardless of fault. Usually $1,000–$5,000.
Most homeowners only discover these exclusions after a claim is denied.
Floods are excluded from every standard policy. You need a separate NFIP or private flood policy. 25% of flood claims come from low-risk zones.
Excluded in all standard policies. Especially critical in CA, OR, WA, and along the New Madrid fault. Separate policy or endorsement needed.
Water backing up through a drain or sump pump is not covered by default. An add-on endorsement costs $50–$150/year.
Slow leaks, rot, mold, and pest damage are excluded. "Sudden and accidental" damage is covered — long-term neglect is not.
Jewelry, art, collectibles, cameras, and musical instruments have sub-limits ($1,500–$2,500). Schedule them separately.
Business equipment over $2,500 and liability from business activities are excluded. Home-based business needs its own policy.
Vehicles are covered by your auto policy, not home insurance — even in your garage.
Most homeowners insure their home's market value. That's the wrong number.
What your home would sell for today. Includes the land — which can never burn down or flood. Insuring this inflates your premium for no reason and still leaves you underinsured if rebuild costs spike.
What it costs to rebuild your home from scratch at current labor and material rates. This is the only number that matters after a total loss. It changes year-over-year as construction costs rise.
Rule of thumb: Multiply your home's square footage by local construction costs ($100–$200/sq ft). Request a replacement cost estimator from your insurer every 2–3 years.
Ask the advisor →Most homeowners don't know which policy form they have — or what the difference means.
Covers 10 named perils only. Rarely sold anymore. Very limited — avoid if possible.
Covers your structure against all perils except those explicitly excluded. Contents on named-perils basis. This is what most people have.
Covers both structure AND contents on open-perils basis. Fewer exclusions, best protection. Worth the extra premium.
Estimate your home insurance premium and see how your coverage level affects the price.
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