Homeowner's Insurance Policies
Most homeowners do not know that in North Carolina we have a variety of homeowner’s insurance 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
Property Coverages
HO-3
HE-7
Guaranteed Replacement Cost
NO (HO-3220 adds 25% Max)
Typically 125% on HO-3
Actual cost to replace
Money in the house
$200 (HO 0465)
$1,000
Securities
$1,500
$5,500
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
Personal Injury
NO
YES
Personal Injury
NO
YES
Special Coverage on contents
N/A
Includes breakage and mysterious loss