Index | Property Insurance | Special Form
Special Form, also known as HO-3 form, insures your home and detached structures against quite a wide range of perils. It is a very popular policy type among Homeowners contracts. Due to its comprehensive coverage Special Form has gained the reputation of the most effective Homeowners policy.
The coverage under the contracts of this type is more extensive than under HO-1 and HO-2 in the Dwelling Coverage section. This kind of a policy is often referred to as "all risk". Special Form covers your home against all risks of physical loss, except those specifically outlined in your policy as exclusions. These are typically losses resulting from floods, earthquakes, war or nuclear hazards. It is important that under a Special Form policy the dwelling is automatically insured for replacement value with no devaluation deduction, though up to specified limits. Attractive as this policy looks at a glance, it is not a "universal cure", which many people consider it to be hoping that it will give them all-round protection. It will not. And it makes sense to get an insight into the policy provisions very carefully to understand what is left behind the offered coverage. For example, you should know that the Dwelling Coverage of Special Form normally does not cover land, including the piece of land where your house is located.
Other Structures Coverage under Special Form provides protection to structures set apart from the insured dwelling by clear space, as well as materials and supplies used to construct or repair the insured dwelling and other structures on the premises. Section B (Other Structures) of your Special Form does not cover locations from which you conduct business. If you are interested in such coverage, remember that business locations require a separate policy which can be added by endorsement.
When it comes to coverage for Personal Property, it is the same as under HO-2. This policy can be an effective financial tool in appliance even to the property that may have never been in your house. You should verify the items of property which are not insured under the Personal Property section of your HO-3. There will certainly be such items and it is likely you will be interested in protecting them. Therefore, it makes perfect sense to check exclusions under this section of your policy. Among the most typical exclusions are motor vehicles, including their parts, equipment and accessories, aircraft, hovercraft, property of roomers or tenants which is subject to a separate policy, business data, and credit cards.
Special Form is also effective in the event of your liability when someone gets injured on the premises or if somebody else's property is damaged. In compliance with its reputation of the most comprehensive Homeowners policy, Special Form guarantees that the insurance company will cover the legal expenses you incur and costs taxed against you. At the insured's request the insurance company can also cover personal property owned by others if it is damaged on the property of the insured. The insurance company also takes the financial responsibility of paying medical expenses for first aid to others, thus covering bodily injuries people sustain on the premises of the insured. At the same time it is important to note that injuries to the insured are not liable to coverage.
Coverage D - Loss of Use - is also represented in your Special Form Policy, which means that if a loss covered in Section 1 (Dwelling Coverage) befalls you and makes your home unfit for living, your policy will cover any living expenses you will have to incur trying to maintain your usual standard of living while your home is being rebuilt or repaired.
Like with all the other types of Homeowners policies there are limits imposed on each coverage type offered under such a policy. In the standard HO-3 policy the limit in Coverage B will normally be 10% of the amount of Coverage A. The Coverage C limit is 50% of the limit on Coverage A. The Coverage D limit is usually 20% of the limit on Coverage D.
However extensive the coverage offered under Special Form is, it may not be enough. That is why it is important to assess your needs and decide what supplemental policies you may need. The most typical supplemental policies offered together with Special Form are reasonable repairs which is aimed at covering the costs you have to pay to make the necessary repairs, debris removal if your property sustained a covered loss, trees, shrubs and plants damaged on the insured premises due to one of the covered reasons, and the policy covering a loss to the insured resulting from forgery or unauthorized use of the credit card.
If having opted for Special Form, you are still not satisfied with protection you receive under this policy; you may cancel it by contacting your insurer and sending the insurance back or indicating the exact date when cancellation is to take effect. Your insurer may also cancel your policy in case you have not paid the premium. In this case you will be warned 10 days before the cancellation.
Another case for canceling your policy is when it has not been in effect for 60 days yet but it is not liable for a renewal with the insurance company. Quite a serious reason for the insurance company to cancel your policy is if there has been some misrepresentation of facts on your part or if the potential risk has changed since the time your policy was issued.
If you have studied the guiding principles of your Special Form, have learned all the exclusions and have come to the conclusion that it suits your needs, you can be sure that it will operate in your interests. What you need is just a bit of acumen. Your insurance and the company that underwrites it will take care of the rest.