In everyone’s life, one of the most satisfying dreams is to own a house and to keep it safe, maintained and as always is a necessity. When you opt for homeowners insurance there is always a dilemma and you try to get the best policy according to your need and requirement. Christian Insurance Agency provides you both HO3 and HO5 homeowner’s policies in Texas cities like Dallas, Houston, etc.
In accordance with 2015 National Association of Insurance Commissioners (NAIC) report stats for the year 2012 shows, 62.9% of the total insured homes had the HO3, and 9.4% had the HO5.
The HO3 Policy
HO3 is the traditional policy most common among the home owners, it is a combination of open peril and named peril where your home is covered by the open peril policy and the belongings are covered by the named peril.
The HO5 Policy
HO5 is the popular policy in recent times; it is an extensive form of HO3, providing higher coverage by exceeding the limits on jewelry, business property, furs, and silverware. It covers both your dwelling and personal property as an open peril.
What is Open and Named perils?
Peril is a subjective term of disaster/cause used by an insurance agency.
Open perils – It provides coverage for all causes except which are not specifically excluded in the policy.
Named perils – It provides coverage for only those that are included in the policy; there are typically 16 of them.
Difference between HO3 and HO5 Policy
Perils –The HO3 is a combination of open peril and named peril, whereas HO5 is an open peril policy.
Coverage – HO3 covers your dwelling as open peril and belongings (personal property) as a named peril, whereas HO5 covers both dwelling and belongings as open peril.
Claim – In HO3 you have to prove that the personal property losses were caused due to any of the named perils, whereas in HO5 you are not required to reason unless otherwise it is specifically excluded by an insurance agency.
Popularity – HO3 is traditional, popular and more commonly used over decades, whereas HO5 is comparatively new and gaining popularity because of its extensive coverage.
Expense – HO3 is more affordable than HO5. If you have budget constraints HO3 is well suited.
Which policy to choose?
Assuming that you qualify for both the forms; the HO5 is the recommended as the price difference is not that much and it gives a wide range of coverage. Your belongings are also valuable and if you do not want to take the risk, choosing a slightly expensive option will prevent you from some hassle.
Christian Insurance Agency will guide with the policy which is most suited for you, as we care for your home just like you care for it. Our dedication towards your requirement is the key to our success.
You can call us at 281.789.4070
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