Home Owner Policies
Most homeowners do not know that in North Carolina we have a variety of homeowner’s policies. The main two I want to focus on are the HO-3 and the HE-7 and the replacement cost on your home.
In the event of a total loss, the HO-3 will give you the amount you list on the policy (which is your 100% amount) plus a possible 25% more for increase cost of construction. That gives you a total of 125% to rebuild your house. Of course you need to pay for the extra 25%.
The HE-7 is a guaranteed replacement cost policy. As long as you start with the 100% of what it cost to rebuild your house, then if anything happens, your house will be rebuilt back to the way it was regardless of what you have listed on your policy. In other words, you aren’t limited to the 125%.
A large portion of the insurance companies in North Carolina do not offer the HE-7 coverage form. So when you call to get a comparative quote be sure to ask which form they are quoting. You wont be getting apples to apples if you dont ask.
Always ask for the HE-7 form. The cost is usually less than the HO-3 and you get much more coverage.
HE-7 versus HO-3 Homeowners:
|Guaranteed Replacement Cost||
NO (HO-3220 adds 25% Max)
Typically 125% on HO-3
|Yes Actual Cost to replace|
|Money in the house||$200 (HO 0465)||$1,000|
|Jewelry Theft||$3,000 must be evidence of break in||$5,500 total ($1,500 per item, includes losing, misplacing & disappearance|
|Firearms Theft||10% of coverage C up to $10,000||$10,000 includes mysterious disappearance|
|Silverware Theft||25% of C up to $10,000||$10,000 includes Mysterious disappearance|
|Tree Removal-must hit structure||$1,000||$2,000|
|Trees Shrubs & other plants||5% of cov. A up to $500||5% of Cov. A up to $1,000|
|Deductible Waiver||NO||YES-if loss over $50,000 deductible waived|
|Fine Arts & Antiques||Must be scheduled||Covered to actual value up to the total contents amount|
|Directors & Officers-non profit organizations only||N/A||Included|
|Pre judgement interest||within policy limits||Paid as a supplementary|
|Personal Property Loss Settlement||Actual Cash Value (ACV) can add RC additional charge||Replacement cost|
|Ordinance of Law||10% of coverage A||Part of Coverage|
|Loss of use from Power Outage||On Premises power outage only||On premises w/ 48 hr waitOff Premises w/ 48 hour wait|
|Food Spoilage||Optional coverage add HO-0498||YES $500 no deductible applies|
|Loss of Use Civil Authority||2 weeks||30 Days|
|Special Coverage on contents||N/A||includes breakage and mysterious Loss|