The HO1 Home Insurance Policy is one of the most basic home insurance policies available to homeowners. Most homeowners who purchase HO1 insurance are insuring for catastrophic losses only. The HO1 home insurance policy only protects the home and contents for the most common perils that occur.
HO1 Home Insurance Policy
HO1 Insurance Policies Cover Named Perils
The H01 insurance policy is a named perils insurance policy. This means it covers your home (dwelling) and all the stuff you own (your personal property) for damage caused by perils that are named – or listed – in your policy.
If an event causes damage to your dwelling or personal property, and that event is listed in your policy as being a covered peril, good news: it’s covered under the policy! If it’s not, then you’re out of luck.
HO1 Insurance Named Perils List
The HO1 insurance policy only covers 10 perils. The following list shows what is considered a named peril – and as a result covered – in a standard H01 policy:
Vehicle damage is typically only included if it’s not done by the insured, and theft is usually limited to just $1,000 in a standard HO1.
Other than that, if a peril from the list above damages your home or your stuff, the HO1 insurance policy should cover it after your deductible.
HO1 - Replacement Cost or Actual Cash Value?
The HO1 home insurance policy is normally written as a Replacement Cost policy rather than an Actual Cash Value policy, but can be written as either.
Replacement cost coverage simply means that if anything needs to be replaced, it will be replaced with brand new materials at today’s cost, regardless what the material was worth at the time it was destroyed.
For example, suppose five years ago you bought a t-shirt for $20. What is that worth today? Probably $2. If your house burns down and your t-shirt gets destroyed, a replacement cost policy covers the cost to replace the shirt at today’s prices for a similar brand-new shirt, or in this case around $20.
Actual cash value policies depreciate the value of the material that was damaged before paying out on claims. This means that you get paid on today’s value of the materials, not the value when you purchased them.
Using the same example of the t-shirt above, if your house burns down and your t-shirt gets destroyed, an actual cash value policy covers the cost to replace the t-shirt at today’s value, or in this case only $2.
While HO1 insurance policies are typically replacement cost, be sure to check with your agent before moving forward with this policy.
Home Policy Comparison - Baseline H01
