All-Risk Protection Is Provided By HO-3 Policies
The HO-3 "special form" insurance plan gives protection for all risks except for those specifically excluded in the declarations page of the policy.
Because it provides a comprehensive level of coverage for single-family homes, the HO-3 special form is the most-used type of homeowners insurance in the United States.
Instead of listing perils that are covered by the policy, an all-risk policy only lists those perils that are excluded from coverage.
A typical HO-3 policy will cover damages or destruction caused by covered perils to the primary home, attached structures and other structures connected by utility lines, fence lines and walkways.
Personal belongings also are protected up to policy limits as is liability if anyone is injured or killed on the premises.
While the special form provides all-risk coverage, several perils specifically are excluded.
Some of the excluded perils could be insured with either an endorsement or by purchasing a separate policy.
The most common peril not protected is external flooding.
While homeowners insurance plans usually give automatic protection against water damage caused by internal flooding, few if any property and casualty insurers will cover damages caused by external flooding.
External flooding is common in many areas, and many property and casualty insurers will not provide flood insurance due to the high risk.
Flash flooding and similar causes can be common, and many local governments as well as the federal government have been upgrading floodplain maps and requiring flood insurance for homes and other properties located within them.
Other common exclusions on all-risk policies include earthquakes, power failures and neglect.
Endorsements can be purchased for damages caused by earthquakes and power failure, but neglect never will be covered.
When a property owner is aware of a potential problem, such as a bad roof, and fails to address it in a timely manner, the insurer will declare the person to be a "moral hazard" and will not provide insurance protection losses caused as a result.
Other common exclusions are acts of war, damages caused by government actions, nuclear hazards and intentional acts.
Vacant buildings damaged by freezing pipes and other systems also are not covered, and neither is damage to foundations or pavement from ice or water weight.
Also excluded from all-risk coverage is theft from a home or dwelling that is under construction.
Losses caused by latent defects, corrosion, industrial smoke or pollution also are not protected.
Other exclusions include losses caused by settling or wear and tear.
Losses caused by pets, pests or other animals, weather conditions that further losses caused by excluded perils, such as an earthquake, or defective design, construction or faulty maintenance also are not covered by HO-3 policies.
Because it provides a comprehensive level of coverage for single-family homes, the HO-3 special form is the most-used type of homeowners insurance in the United States.
Instead of listing perils that are covered by the policy, an all-risk policy only lists those perils that are excluded from coverage.
A typical HO-3 policy will cover damages or destruction caused by covered perils to the primary home, attached structures and other structures connected by utility lines, fence lines and walkways.
Personal belongings also are protected up to policy limits as is liability if anyone is injured or killed on the premises.
While the special form provides all-risk coverage, several perils specifically are excluded.
Some of the excluded perils could be insured with either an endorsement or by purchasing a separate policy.
The most common peril not protected is external flooding.
While homeowners insurance plans usually give automatic protection against water damage caused by internal flooding, few if any property and casualty insurers will cover damages caused by external flooding.
External flooding is common in many areas, and many property and casualty insurers will not provide flood insurance due to the high risk.
Flash flooding and similar causes can be common, and many local governments as well as the federal government have been upgrading floodplain maps and requiring flood insurance for homes and other properties located within them.
Other common exclusions on all-risk policies include earthquakes, power failures and neglect.
Endorsements can be purchased for damages caused by earthquakes and power failure, but neglect never will be covered.
When a property owner is aware of a potential problem, such as a bad roof, and fails to address it in a timely manner, the insurer will declare the person to be a "moral hazard" and will not provide insurance protection losses caused as a result.
Other common exclusions are acts of war, damages caused by government actions, nuclear hazards and intentional acts.
Vacant buildings damaged by freezing pipes and other systems also are not covered, and neither is damage to foundations or pavement from ice or water weight.
Also excluded from all-risk coverage is theft from a home or dwelling that is under construction.
Losses caused by latent defects, corrosion, industrial smoke or pollution also are not protected.
Other exclusions include losses caused by settling or wear and tear.
Losses caused by pets, pests or other animals, weather conditions that further losses caused by excluded perils, such as an earthquake, or defective design, construction or faulty maintenance also are not covered by HO-3 policies.
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