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Not all Homeowners Policies are created equal!

Buyer beware! Just because most of the coverage lines match up, it does not necessarily mean you are receiving an apples to apples comparison. When it comes to homeowners policies there are 3 main coverage forms, which define what types of claims your policy will be insured against. Basic peril, Broad/Named peril, or Special/Open Peril forms.

Basic peril coverage is not typically something standard carriers dabble in but they may in situations where the property has cause for concern, e.g. a vacant home. I would say a majority of the standard carriers, you are likely familiar with, are offering either Broad or Special perils coverage. It is important to ask this when comparing policies.

Broad perils coverage means the policy will explicitly name the types of perils that are covered with certain specific exclusions, such as Weight of Ice and Snow but only if the exterior is damaged first. In this type of policy the burden is on the homeowner to prove that coverage should be provided according to the language in the policy. Absent a clear definition of coverage, the policy would not provide coverage.

Special Perils coverage is the better definition. Instead of stating what is covered, the policy states coverage will be provided absent specific exclusions. In this policy type, the burden lies on the Insurance company to prove that coverage is explicitly excluded. Absent a clear definition of why a claim is not covered, the policy must pay out damages.

It is also important to not that you may have one level of coverage for your Dwelling, e.g. Home, Outbuildings, Deck, etc. and a different level for your personal property, which is your belongings. The most common policy we see is a Special Perils policy for the Dwelling and Other Structures, but Broad Perils for personal property.

In the Midwest, Ice damning is a common claim and the wording of these policies would often provide coverage for the damage to the structure its self but not any personal belongings in this scenario. It is also important to note that two Special Perils policies can include different exclusions. For instance, one company excludes damage caused by vermin, while another does not. So as you can see you seldom ever truly receive an apples to apples comparison. Lastly, I would venture to say bad reviews, more often than not, are the result of the type of policy written, not the companies claims service.

Michael Vereecke, CLCS
Michael Vereecke, CLCS

President of Customer First Insurance Group,
Commercial Lines Coverage Specialist (CLCS) Designated, and Property and Casualty Licensed since 2009

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