Both HO-3 and HO-5 are types of homeowners insurance policies that cover damage to your dwelling and other structures from all but excluded causes of loss. The main difference is what kinds of damage each policy covers for personal property.
Both types of homeowners insurance policies include coverage for your dwelling, other structures on your property, personal property, loss of use, personal liability, and medical payments to others.
The primary difference between the two policy types is how claims are settled for your belongings. To understand the difference, you'll need to know the terms named perils and open perils special form. An insurance policy with named perils coverage will only cover losses caused by perils specifically named in the policy.
Named Perils Named perils coverage is a policy that provides coverage for losses at your property from a specific list of covered losses. For example, if the named perils policy says that your covered losses are: fire, earthquake, and hail; those are the only losses that will be covered on your policy.
On the flip side, if you happen to have a loss due to fire then your insurance policy would provide coverage for any damage related to the fire. Comprehensive Coverage : Comprehensive coverage is a policy that provides coverage for all losses, unless otherwise excluded. So a comprehensive policy might say that we will cover all perils to your house except earthquakes and hurricanes. For example if you had a loss related to water it would be covered on the policy because it was not listed as an excluded peril; however, if you had a loss from an earthquake your policy would provide no coverage because it is listed as an excluded peril.
It is very important to know what type of policy you have so that you understand what types of losses to your home will be covered.
Always ask your agent what type of home policy you have. Almost all home insurance policies in Canada contain an exclusion that will deny coverage for any losses occurring in a home that is used, in whole or in part, for business purposes. Fortunately, insurance providers like Square One can add permission and coverage for home businesses , ensuring that coverage remains in effect should a loss occur.
Home business owners should also explore options for specialized business insurance, which can help protect against their liability to customers arising out of their work, or for lost income if a loss were to prevent them from carrying on their usual business activities. Customers of Square One automatically receive a comprehensive policy form, with the ability to customize their coverage further to meet their precise needs, including renovations, vacation homes and rental properties.
Some Square One policies also offer earthquake coverage , and automatically include inland flood coverage for most customers. Want to learn more? Visit our resource centres for hundreds of helpful articles created specifically for homeowners, condo owners, landlords, and tenants. Then, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.
Get a personalized online home insurance quote in just 5 minutes and see how much money you can save by switching to Square One.
Get an online quote now. Even when you take precautions, accidents can happen. Home insurance is one way to protect your family against financial losses from accidents. What types of home insurance are available? Topics Named perils Comprehensive Broad form What offers the best coverage?
Under constuction Business. Fundamental types of policies Three fundamental types of policies include: Named perils These are the most restrictive policies available, protecting you against only a narrow selection of losses. Comprehensive On the other end of the spectrum are comprehensive policies , which are also referred to as all-risk policies. Broad form Broad form policies fall somewhere in the middle ground, providing comprehensive protection for your home, and named perils protection for your personal property.
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