The homeowners policy provides protection against the financial consequences of personal losses. A homeowners policy is a combination of property and liability coverages. The homeowners policy is tailored to meet the needs of the homeowner. The following is a basic outline of the HOMEOWNERS (HO-3) POLICY and the endorsements most widely used on the HO-3 policy. There is an enhanced for, HE7, available in North Carolina that broadens some of the coverages and increases some of the limits of coverage described below. There are also HOMEOWNER FORMS FOR RENTERS (HO4) and CONDOMINIUM UNIT OWNERS (HO6).

The HO-3 policy provides coverages for one or two family dwellings that are owner occupied. The HO-3 policy provides coverage against risks of direct physical loss to real property, except those causes of loss that are specifically excluded such as flood, nuclear radiation, earthquake, insects & termites, and normal wear and tear.
Personal property is covered against direct physical loss caused by a specified peril such as fire, lightning, wind, smoke, explosion, civil commotion, hail, aircraft, vehicle, riot, theft, and freezing / burst pipes. In addition to the coverages stated under Section I, several additional coverages are included. Some of the coverages included are; debris removal, fire department charges, reasonable repairs charges, property removal charges, and coverage for trees, shrubs and plants. Coverage is also included for loss involving credit cards, forgery, and counterfeit money. These additional coverages are included to provide protection for the insured following a covered property loss. Each additional coverage has limitations and is subject to certain conditions.

This amount of insurance applies to the dwelling and attached structures. The limit of insurance for the dwelling is based on the value of the home and what it would cost to replace the home.

Other Structures
This coverage limit applies to detached structures such as a garage or storage shed. The limit of coverage is set at 10% of the dwelling. The insured can purchase a higher limit.

Personal Property
Coverage C provides worldwide coverage for personal property of the insured. Special limits apply to some types of property, and some property is excluded from coverage. the overall limit for coverage C is usually 70% of the dwelling limit. Coverage C can be modified in several ways with endorsements.

Loss of Use
This coverage applies in the event of a loss under Coverage A. If the insured was to temporarily lose use of the dwelling this coverage would apply. Payment would be made for additional expenses incurred to live elsewhere following a loss that makes the home unsuitable for living. Another method used to determine payment for loss of use is fair rental value, which is the amount of rent that could reasonably be charged for the premises, less any expenses that do not continue while the premises are unsuitable for living.

Personal Liability
Section II of the homeowners policy provides liability for personal loss exposures. The insuring agreement under Coverage E provides liability coverage if a claim is made or suit is brought against an insured because of bodily injury or property damage. Coverage is provided for the residence premise as well as any other premises used by the insured, as a residence, permanently or temporarily. Liability coverage is provided for the named insured and members of the named insured's household who are relatives. Personal liability has a basic limit of $100,000 per occurrence, which the insured may increase for an additional premium. In addition to the basic limit, Coverage E also provides additional coverages for expenses such as defense cost, expenses incurred providing first aid to others, damage to property of others and loss assessment charges. The additional coverages provided under Section E are subject to limitations and certain conditions.

Medical Payments
this coverage will pay the necessary medical expenses for bodily injury of others. Coverage applies to accidents that occur on the insured premises or any location when caused by action of the insured. the coverage has a basic limit of $1,000 per person. The insured may select higher limits.

Earthquake Coverage Endorsement
Increase Other Structures Limit
Increase Special Limits
Scheduled Personal Property
Personal Property Replacement Cost

As always, we highly recommend that you sit down with one of our experienced account executives to discuss your specific needs, after which we will provide a detailed insurance strategy and quote for your business.


Q. What are the policy limits (i.e., coverage limits) in the standard homeowners policy?

(Note: this answer is based on the Insurance Services Office's HO-3 policy.)

A. The dwelling and other structures on the premises are protected on an "all risks" basis up to the policy limits. "All risks" means that unless the policy specifically excludes the manner in which your home is damaged or destroyed, there is coverage. The policy limit for the dwelling is set by the policy owner at the time the isurance is purchased. The policy limit for the other structure is usually equal to 10% of the policy limit for the dwelling.

Losses to your personal property are covered on a "named perils" basis. "Named perils" means that you have coverage only when your property is damaged or destroyed in the manner specifically described in the policy. The policy limit on the coverage is equal to 50% of the policy limit on the dwelling. Limits for the coverage for the additional expenses that the policy owner may incur when the residence cannot be used because of an insured loss is equal to 20% of the policy limit on the dwelling.

The coverage limit on personal liability is determined by the policy owner at the time the policy is issued. The coverage limit on medical payments to others is usually set at $1000 per injured person.

Q. What is Homeowners Insurance?

A. There are two types of Homeowners Insurance, NAMED-PERIL INSURANCE and ALL-RISK INSURANCE. The first one pays only for the causes of oss specified in the policy. All-Risk Insurance covers losses except those specifically excluded in the policy.

Q. How do I get the lowest rates?

A. Insurers frequently award lower rates to homeowners who guard against theft, accidents and other losses by using such devices as alarm systems. Some companies provide discounts to premium multiple-policy holders (home and auto or life).

Q. My neighbor's tree blew onto my fence. Shouldn't he be responsible for repairing the damage?

A. Your neighbor is only responsible for the damage if there was something about the tree that should have alerted your neighbor to the fact that it represented a dangerous condition. If an "act of God" causes an otherwise healthy tree belonging to your neighbor to damage your property, you will need to look to your own policy (and your own deductible) for coverage.

Q. Do I have to live in a designated flood zone in order to purchase flood insurance?

A. No. Most properties are eligible for flood coverage. It is not a requirement that you live in a flood zone in order to purchase flood insurance.

Q. Will flood insurance cover me if my basement "floods" after a heavy rain?

A. Unless your basement floods as a result of general flooding in the area, there is no coverage under a flood policy for seepage of water into a basement.

Q. What are some practical things I can do to lower the cost of my homeowners insurance?

A. There are a number of things you can do to lower the cost of your homeowners insurance. the easiest thing to do is get a comprehensive review of your needs from your local agent.

It's not surprising to find quotes on homeowners insurance that vary by hundreds of dollars for the same coverage on the same home. When you shop, be careful to make sure each insurer is offering the same coverage.

Another way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. For example, many insurers will offer a discount when you place both your automobile and homeowners insurance with them. Other times, insurers offer discounts if there are deadbolt exterior ocks on all your doors, or if your home has a security system. Be sure to ask us to look into these discounts for you.

Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as five or ten percent.

Q. What does homeowners insurance cover?

A. The typical homowners policy has two main sections: Section I covers the property of the insured, and Section II provides personal liability coverage for the insured. Almost anyone who owns or leases property has a need for this type of insurance. Usually, homeowners insurance is required by the lender to obtain a mortgage.

Q. What is the difference between "actual cash value" and "replacement cost"?

A. Covered losses under a homeowners policy can be paid on either actual cash value basis or on a replacement cost basis. When "actual cash value" is used, the policy owner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

Q. What factors should I consider when purchasing homeowners insurance?

A. Here's a checklist of things you should consider when you purchase homeowners insurance:
1. Determine the amount and type of insurance that you need. The coverage limit of your house should equal 100% of its replacement cost. If your policy limit is less than 80% of the replacement cost of your home, any payment from your insurance company will be less than the full cost to replace your home. You'll have to pay the rest out of your own pocket. Also, decide if the personal property and personal liability limits are adequate for your needs.
2. Determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement, an eathquake endorsement, or a jewelry endorsement?
3. Once you've decided on the coverage you want in your homeowners insurance policy, consult us. We'll be able to help you determine if there are any gaps in coverage you might not have been aware of and explain the detais of the policy's exclusions and limitations, as well as recommend an insurance company that will live up to your expectations.

Q. Where and when is my personal property covered?

A. Personal property (except property that is specifically excluded) is covered anywhere in the world. For example, suppose that while travelling, you purchased a dresser and you wnat to ship it home. Your homeowners policy would provide coverage for the named perils while the dresser is in transit, even though the dresser has never been in your home before.

Q. Do I need earthquake coverage, and how can I get it?

A. the standard insurance policy does not pay for direct damages caused by earth movement. "Earth movement" is a much broader term than "earthquake". It includes earthquakes, volcanic activity, and other earth movement. This coverage may be available by endorsement for an additional charge. If you live in an area that is more likely to have an earthquake, you'll pay more than if you live in an area that is unlikely to have one. we can help you weigh the costs and benefits of this coverage before you decide to purchase.


Contact Woodland Insurance Group LLC

P.O. Box 1298
Wilmington, NC 28402
T: 910-833-8978
F: 910-833-8979

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