An HO-3 policy provides coverage for the dwelling, other structures, and loss of use against all risks of physical damages unless specifically excluded.
It covers personal property against loss by Fire, Extended Coverages, V&MM, Theft, Falling Objects, Collapse, Water Damage, Freezing and Electrical Currents.
An HO-5 policy provides coverage for the dwelling, other structures, personal property and loss of use against all risks of physical damages unless specifically excluded. You will also acquire two additional coverages, accidental loss of an article and misplacement.
Animals, birds, rodents, vermin, insects, fish, motor vehicles, wear and tear, marring, deterioration, mechanical breakdown, smog, rust, corrosion, smoke from agricultural smudging or industrial operations, seepage, pollutants, settling, shrinking, bulging or expansion; tree, shrub, or bush roots; water damage by surface or below ground level water source(flood), earthquake, mudslide, landslide, subsidence or sinkholes, power failure if the failure occurs off premises, neglect, war, nuclear hazard, intentional loss.
* Insured is painting their living room and the paint bucket falls off the ladder and damages their sofa. On an HO-5, there is coverage for this because it is not specifically excluded. There would not be coverage for this on the HO-3 because the loss did not occur from one of the named perils.
* An insured has a ring that is not scheduled and loses the diamond because one of the prongs broke. This would be covered on an HO-5, but not covered on the HO-3.
* Another thing this policy does is if you're also a Nationwide auto policy holder and your airbags deploy for any reason in your car they are replaced at no cost to you.
Which policy should I choose?If your home qualifies for an HO5 policy, then I highly recommend you purchase it. The price difference between an HO3 and HO5 policy is relatively small and in my opinion well worth the better protection.
Please feel free to contact me if you have any questions.
Loss assessment coverage is protection condo owners can use on claims involving the building or its common areas. In most condo communities, your homeowners association (HOA) has its own insurance that covers incidents outside of your personal unit. However, these claims sometimes exceed the HOA master policy limits. If that's the case, you and your fellow condo dwellers might be asked to step in and make up the difference. Condo loss assessment coverage can help you avoid paying out of pocket when a common area claim requires your individual assistance.
Sure, loss assessment coverage sounds important, but will it really ever come into play? You might be surprised at the costly perils that can happen to or in a condo building — and just how quickly you might be called on for help.
1. There's been major weather damage to the outside of the building
Let's say hail or wind strip away major parts of the building, leaving $550,000 in needed repairs. Problem is, your HOA master policy only carries $500,000 in property damage coverage. In which case, the HOA might assess the extra $50,000 to the condo owners — if you're in (for the sake of easy math) a 50-unit building, that's $1,000 you have to cough up. Loss assessment coverage can usually cover that cost for you, helping make sure untimely damage doesn't put unexpected strain on your personal finances.
2. Someone's been injured in a common areaChances are you don't spend too much time worrying about what happens to the visitors who come in and out of your building — many of whom you don't know and never see. But because your HOA is in charge of the common areas of the condo community, you have a partial responsibility for whatever happens to guests on the property.
If someone breaks a leg on the tennis court, has a mishap in the pool area, or simply slips on the front entrance to the lobby, their injury bills could exceed the HOA liability coverage. Luckily, loss assessment coverage can cover your end of things (up to your limits) and help you avoid being left on the hook for an injured guest's medical fees.
3. Shared property inside the building has been damagedAt times, living in a condo probably feels similar to living in an apartment. One big difference, though, is that in an apartment building, the shared and structural items of the building (usually) belong to a landlord or management company. In a condo, on the other hand, you and your fellow residents jointly own the property yourselves.
So if a fire, explosion, or other covered loss damages the elevators, lobby, carpeting, inner walls, etc., you might be asked to shoulder part of the load in repairing them if the cost goes beyond the HOA master policy limits. Loss assessment coverage helps you keep the building running and make the fixes you and your neighbors can't do without.
As a general guideline, it's best to get as much loss assessment protection as you can comfortably afford for the greatest peace of mind against unpredictable mishaps.