HO1 Homeowners Insurance Policy
HO1 insurance policies provide coverage for storm damage to your home, damage to detached structures, expenses incurred for loss of use of your home while it’s being repaired, personal property contained within your home, and general liability coverage for people injured on your property by accident or your negligence.
HO1 policies are considered basic, named perils homeowners insurance. Named perils policies expressly list the causes of damage for which you are covered. HO1 policies typically protect your home and personal property from damaged caused by one or more of the following named perils.
- Fire or Lighting
- Hail storms
- Riots or civil unrest
- Volcanic eruption
- Theft or Vandalism
- Falling objects (trees, parts of the home, etc. – however, you must show that the object fell due to one of the listed perils and not simply due to lack of maintenance or negligence on the homeowner’s part)
As with all named perils policies, if a specific peril is not expressly listed in your policy, you will not be covered. For example, damage to your property from a flood is not covered by standard HO1 policies unless you purchase additional flood insurance.
Typically, HO1 insurance policies calculate loss for your home based on replacement cost which means that if your home is destroyed, the insurance company will pay, up to your insured amount, to replace your home with similar quality and materials without any deductions for depreciation. Watch out for policies, or portions of your policy, that use actual cash value calculations.
Most often applied to your personal property within your home, actual cash value coverage pays you only what the lost or damaged items are worth today. If, for example, the TV you purchased three years ago for $2500 is destroyed, the insurance company will calculate the actual cash value of the TV today and a three year old TV will not be valued anywhere near the $2500 it may cost to replace the set.
Due to its narrow list of perils, HO1 insurance policies are out of mainstream use today with the more common HO3 policy considered standard coverage.