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What Insurance Agents Need to Know about Homeowner’s Insurance

A house is only brick and mortar, steel and glass. But a home? A home is the place where people rest their feet and snuggle their dog after a long day. It’s where they mark their child’s growth on the door frame with a pencil. A house is a major investment; a home is where people keep everything – and everyone – they love. Both require protection.

Few people are going to make a more important purchase than a home, and safeguarding that investment is a no-brainer for most. But that doesn’t mean they know the ins and outs of Homeowner’s Insurance. Let’s review the basics so you’re prepared when clients need your help.

What Is Homeowner’s Insurance?

Homeowner’s Insurance is a multiple-line insurance policy that provides both property and liability coverage. This means that it can pay for:

  • Damage to the residence.
  • Living expenses when the home is uninhabitable.
  • Replacement of ruined items in the house.
  • Repairing a guest’s damaged property.
  • Medical bills when a visitor is injured.

Most Homeowner's policies can help pay for damages caused by fire, theft, vandalism, and windstorms, but you can help your client customize their policy with riders to address additional perils. An Insurance Noodle representative can help you determine what options are available.

Which Clients Need Homeowner's Insurance?

Most mortgage lenders require insurance as a condition of the loan, so unless your client is paying the full purchase price, they’ll need Homeowner's Insurance sooner rather than later. Even if they can afford to buy a house outright, they should still protect their investment. The financial consequences of a disaster, man-made or natural, can devastate any bank account.

How Does Insurance Noodle Give Agents Access to Multiple Homeowner's Markets?

The type and location of your client's property impacts their coverage options. For example, if your client's home is out in the country, some providers may not have the appetite for it. Pick it up and drop it next to the local fire department, and suddenly it’s an insurable property.

But when you have access to carriers with broad risk appetites through Insurance Noodle, you don't have to worry whether or not you'll be able to insure your client's home. Our portal offers a single application that gives you access to:

  • Standard home markets (e.g., for single family homes).
  • Specialty home markets (e.g., for rental properties, old or low-value homes, and vacation homes).
  • High-value home markets (e.g., for mansions).

Don't risk losing an account. Place the risk with Noodle to help your clients get fast coverage from top-rated carriers.

What Form Should Agents Use to Write Homeowner's Insurance?

Homeowner’s Insurance has become fairly standardized throughout the industry. The ISO forms are divided into categories based on the type of residences and perils they protect.

For example, most single-family homes require HO-3 or HO-5. HO-3 is a fairly broad form that covers an array of named perils. HO-5 is a more comprehensive form written on an open-perils basis.

Here's a brief overview of each type of form:

  • HO-0 – Dwelling Fire Form. Homeowners who rent out their home or condo usually require this policy. It insures the physical structure of the home, but not the policyholder’s personal property, liability, or medical expenses. Sometimes lenders buy HO-0 for borrowers when their Homeowner’s Insurance policy lapses.
  • HO-1 – Basic Form. HO-1 is a "named-perils" form, meaning it explicitly lists the types of events the policy covers. However, because it only lists 11 perils, most states no longer offer HO-1.
  • HO-2 – Broad Form. HO-2 offers coverage for 16 listed perils, including all 11 on HO-1. Typical perils include fire, windstorm, and hail. If a peril isn’t listed on the form, it's excluded.
  • HO-3 – Special Form. This is the most comprehensive coverage for single-family homes. It's an "open-perils" form, meaning it lists only the perils that are excluded. If a peril isn't explicitly listed, it's covered. However, the home's contents are usually covered on a named-peril basis.
  • HO-4 – Contents Broad Form. Also called the tenants form, HO-4 is essentially Renter’s Insurance. It provides protection for personal property and covers the same perils as HO-2 or HO-3. It also includes liability coverage for third-party injuries and property damage.
  • HO-5 – Comprehensive Form. This is similar to HO-3 except that the contents are covered on an open-perils basis.
  • HO-6 – Unit-Owners Form. HO-6 is the Condo Insurance form. It covers the policyholder's personal property and the unit's walls, floors, and ceiling against all the perils in the HO-2 form.
  • HO-8 – Modified Coverage Form. This is the form to use when insuring an older, owner-occupied home with a replacement cost that far exceeds the property's market value. It provides "functional replacement," meaning the insurer can replace damaged property with items that perform the same function even if they aren’t identical to the original.

If your client owns a home, chances are Insurance Noodle has a market to match. To become a Noodle member and get immediate access to top carriers, call us at 888.466.8848 or email [email protected]

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