The HO3 insurance is the most regularly bought homeowner's insurance policy. This policy protects you and your family along with your property against several risks that might harm your valuables. Due to its popularity, most houses are insured under an HO3 insurance.
As HO3 insurance is one of the most common insurance policies homeowners purchase, it covers all the aspects of coverage a homeowner might need. It is also known as a hybrid policy due to its combined policies of open perils and named perils. You might already know this, but let's see what they are first to avoid confusion. Open perils policy gives full coverage to home and personal property from any risks unless it is specified explicitly in the plan. The plan doesn't name the risks it covers but calls the ones it doesn't. On the other hand, named perils are precisely the opposite. It calls all risks it covers, so an agent has to go through all lists to check if all risks have coverage or not. Your clients' valuables are only insured against the risks if they are explicitly listed on the policy. Agents might get confused with the HO3 insurance due to the different coverage mentioned earlier. In a HO3 insurance, the house or dwelling usually has an open peril coverage, while the personal property or contents of the house usually has a named peril coverage. The most suitable clients for HO3 insurance are owners occupying homes that have 1 to 4 dwelling units. Apartment complexes are examples of such dwelling. There are two shortages when it comes to this policy, named perils on personal property and water damage. The personal property exclusion might make it difficult for homeowners to recuperate in case of loss. But there are ways to overcome the gaps of the HO3 insurance, which we will discuss later. |