What types of losses are covered under my homeowners policy?
Typically, there are two policy forms available on the market today.
The first and most common is the HO-3 or Named Peril Homeowners. This includes, but is not limited to the major or
more common causes of loss, including Fire, Lightning, Windstorm & Hail, Explosion, Smoke, and Vandalism.
The second and more comprehensive form is the All-Risk Homeowners. This includes all causes of loss except those named
in the Exclusions Section of your contract. Common exclusions include, but are not limited to Gradual Loss, Flood, Earth
Movement, Neglect, Faulty Construction, Acts of War and Radioactive Contamination.
Please take the time to carefully review your policy form for both your Home and Contents coverage sections.
What types of losses are NOT covered under my Homeowners policy?
There are several universal exclusions, or causes of loss that are never covered under any standard homeowners contract.
These include, but are not limited to Flood and Earthquake. In some cases, you may add Earthquake by endorsement,
however, under no circumstances is Flood covered under your homeowners contract. This coverage must be purchased separately.
Please take the time to carefully review your policy form for both your Home and Contents coverage sections.
Generally speaking, property insurance is for catastrophic, unforeseen losses. It is not meant to be used as maintenance for
your home.
What’s the difference between Replacement Cost and my home’s purchase price?
Depending on the community in which your home is located, the replacement or rebuilding cost can exceed or be much less than
the purchase price.
For example, a home in a very desirable suburb like Greenwich, CT may cost $2,000,000 to purchase, but if it’s only
3000 square feet, it may only cost $1,000,000 to rebuild.
Conversely, a very large, older home in a rural community may only cost $500,000 to purchase, but may cost $1,200,000 to
rebuild to similar standards.
In other words, the quality, age and location of your home will dictate the final rebuilding cost. The real estate market in
your community is driven by unrelated factors, and has little bearing on what General Contractors will charge to rebuild or
reconstruct your home in the event of a loss.
What coverages do I need for my Condominium or Cooperative?
Typically, there are two property sections for which you will need coverage. These include Personal Property or the contents
of your apartment, and Unit Owners Improvements or Additions & Alterations, which cover the permanent attachments to the
unit itself. Unit Owners Improvements include items like kitchen appliances, countertops and cabinets, drapes, wall coverings
and lighting, bathroom fixtures and special floor coverings. As a unit owner, you’re financially responsible for any
capital improvements or upgrades made to the unit, whether by you or a previous owner. In cities like New York, every condo
or co-op is potentially different from the one next door; therefore, it behooves you to carefully consider what items are your
responsibility to replace, and what items, if any, are covered under the building’s master policy.
Condo owners are ostensibly responsible for more of the unit itself, however, given current market trends, co-ops are trimming
their building’s coverage in the effort to control overhead. Please be certain to check with your board or superintendent.
Many policies also provide Unit Assessments coverage for any involuntary assessments made by the building to its constituents for
losses not covered under the building policy. However, voluntary assessments for building upgrades and the like are not covered.
As with Homeowners, there are two basic policy forms: Named Peril and All Risk. Please take the time to carefully review your specific policy form.
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