1. So Many Pages, So Little Time
It is a difficult read and it is a very lengthy document. In the desperation of the moment, when you have endured an unwanted and unexpected disaster in your home like a fire or a water loss, you will be tempted to skim through your policy in attempts to find coverage for your specific loss. However, it will not be as simple as you think it should be. Your homeowner’s insurance policy is complicated and may seem contradictory at times. The Special Form, also known as “HO-3”, is the policy that offers the broadest coverage for Homeowners. The Special Form (HO3) has a section named “Section 1- Perils Insured Against”. You must read carefully to realize that The first category named “Coverage A – Dwelling and Coverage B Other Structures”, is really stating “they cover physical loss to the property in A and B, however they do not insure…” etc. Therefore what follows is a list of Perils that you are NOT Insured Against.
2. More Things You Are Not Covered For
Just when you think you’ve finished reading about all the things that you are not covered for, please feel free to continue to the next part named “Section 1 – Exclusions”. Here you’ll find yet another list of events that your policy will not be covering you for. The Special Form is supposed to offer the most coverage compared to other forms. This is why it is worded to show that “it covers everything…except the following”. However, that list of events not covered grows and grows every year, so make sure to read carefully.
3. And lastly, some more reductions to your coverage…
Once you’ve gone over all the possible exclusions and coverages of your policy make sure to check the last couple of pages. This is where you will typically find “endorsements” to your policy. These additional forms will change your coverage to either give you more coverage or reduce it. Sometimes, your insurance agent will offer endorsements that reduce coverage to water damage in order to get a reduced premium. This endorsement typically gives you a limit of $10,000 per occurrence or excludes it all together.