On August 5th, Anthony DiUlio, partner at Wheeler, DiUlio & Barnabei, hosted a lunch & learn webinar, Policy 101: Understanding an Insurance Policy. Viewers were taught how to understand an insurance policy, from its real meaning to how to use it against the carrier.

Insurance policies themselves are quite difficult to read and interpret as the average length of a policy is 70 pages. In fact, the readability scale created by the NAIC rated insurance policies more difficult to understand than Einstein’s Theory of Relativity. Wheeler, DiUlio & Barnabei strives to help you better digest all that comes with an insurance policy.

Here’s a recap of some of the information from the lunch & learn webinar:

Homeowner’s Policy Types

There are many different types of insurance policies. It is important that you know the difference between each one and which policy you fall under. The different homeowner policy types are:
HO-1 – the barest bone of coverage because it is a basic named permit, structure only, no liability. It may be limited only to items like fire and lightning.
HO-2 – basic named permit with only a specific list of items covered and includes structure, content, and liability.
HO-3 – same as HO-2 but includes all risk on structure, owner occupied content NP, and liability. Be sure to always check the language of HO-3 risk coverage!
HO-4 – a renter’s policy, only covers contents with possibly some liability coverage.
HO-5 – one of the best policies because it includes all risk on both structure and content.
HO-6 – a condo policy involving personal property, improvements and liability.

Significant Parts of a Policy

There are two significant parts of a policy: the coverages with the limits and the forms. No two carriers will have the exact same forms, so be sure to read all parts of each policy you encounter.

What Is The Structure Of A Form Address?

A form usually takes on the following titles: LL ## ## MM YY. LL stands for the line of insurance or type, ## ## means the form number and type, and MM YY stands for the Month/Year of the latest update. For example, this form addressed “HO 00 03 05 01” means the following:
HO = homeowner policy type
00 = primary form number
03 = special form section
05 = May
01 = 2001

General Layout of Homeowner’s Policy

The general format of a HO policy is the following:

  • Table of Contents
  • Agreement (The basis of the entire agreement)
  • Definitions (Confirms the understanding of the terms of the agreement)
  • Section I – Property Coverages (Outlines what is and what is not covered)
    • A.) Covered Areas
    • B.) Property Not Covered
    • C.) Additional Coverages (Very important to read all coverages)
    • D.) Losses Insured
    • E.) Losses Not Insured
  • Section I – Loss Settlement (How a loss is paid for)
  • Section I – Conditions (Three biggest ideas dealing with duties after loss and what comes after are prompt notice, proof of loss when requested, and cooperation)
    • *There is no requirement for proof of loss, however, pictures and evidence of the damage can help your case.
  • Section II – Liability

Always be sure to check the definitions, be on the lookout for contradicting details, and read the entire policy and listed coverages.

Interested in learning more? Register for our next lunch and learn webinar.

Have any questions about insurance policies? Click here to contact us.