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Know Your Home Insurance Policy

The phrase “that’s not covered” is not something homeowners want to hear, especially if an event, such as severe weather damage or stolen property occurs. You can avoid these unwanted surprises by making sure your home insurance policy has adequate coverage for your specific needs.

Understanding Homeowners Policy Numbers

Your homeowners policy number explains what type of coverage you have. Homeowners policies generally range from an HO-1 to an HO-6, with each one providing different coverage. GuideOne policies will show a GuideOne Homeowners (GHO) prefix followed by a form number.

  • HO-1 and HO-2 policies provide coverage for named perils only and are less broad. They are less popular and are no longer the industry standard. GuideOne Insurance no longer writes HO-1 and HO-2 homeowners policies. As can be expected, HO-2 is more costly than HO-1, and HO-3 is the most expensive due to expanded coverage.
  • Our GHO-3 policy does not name specific causes that the plan covers like HO-1 and HO-2. Instead, the GHO-3 names the perils that the plan does not cover. The GHO-3 will provide coverage in more situations than a HO-1 or HO-2 would.
  • The PACER policy offered by GuideOne offers even more coverage. It has built in replacement cost for your contents, added coverage benefits like disability coverage, and increased sub limits for your personal property.
  • The GHO-4 policy provides coverage for an individual who is renting an apartment, and provides coverage for your personal property. The GHO-6 policy is intended for owners of a condo. It does not provide structure coverage, but will provide coverage for personal property, fixtures, and built in appliances.

Deciding Your Coverage Needs

Sixty-four percent of houses in the United States are not properly covered. And, of these properties, the average homeowner only has enough insurance to rebuild 81 percent of their home, should an unfortunate event occur, meaning that the homeowners would have to make up the difference.

This makes it critical to ensure your insurance policy is based on the costs of rebuilding your home, not just the price of your home. With the current economic times, the selling price of your the selling price of your home may be significantly different from the actual costs of rebuilding, should disaster strike. If your policy is not based on the rebuilding price, you could risk not having enough funds to rebuild your home in similar size and quality as your current home. is a good Web site for estimating the current replacement cost value for your home. However, the best thing you can do to ensure you are property protected is to have your insurance agent estimate the replacement cost for your home.

In addition, since most policies cover 100 percent of rebuilding costs, defining “100 percent” is important. The coverage could be actual cash value, meaning 100 percent of the current value minus depreciation on items such as TVs, furniture and computers. While protection, which includes 100 percent coverage of the replacement cost, may be a bit more expensive, it will allow you to replace items that have depreciated to be replaced with another of similar quality.

Keeping Inventory of Your Personal Possessions

Create a list containing all of your personal possessions, adding and updating it as necessary. Also, keep track of when and where you purchased these items, possibly including receipts. This will help settle claims faster, should any of your possessions be damaged or stolen. A useful online tool for tracking home inventory can be found on the Insurance Information Institute Web site: If possible, it may save time and be more accurate to do a periodic walk-through of your home with a video camera, and keep the tape in a safe location away from your home, such as a safe deposit box.

Adding on Extras

You also may want to consider additional coverage for your home for your more expensive possessions. Most plans have limits on the amount that can be reimbursed for certain items, such as jewelry, art and antiques. You can purchase endorsements to increase the coverage provided from these items.

Homeowners policies exclude floods and/or earthquakes from their plans. If you live in an area prone to the earthquake, consider adding an endorsement to further protect your home in case of such an event. Flood coverage is available through the National Flood Insurance program (NFIP). For more information on flood insurance, visit the NFIP Web site which has printable educational materials, including a list of the most frequently asked flood insurance questions.

Your home is one of the largest investments you’ll ever make. Take time to ensure you have the proper protection and coverage for your possessions before disaster strikes.


© 2020 The GuideOne Center for Risk Management, LLC. All rights reserved.This material is for informational purposes only. It is not intended to give specific legal or risk management advice, nor are any suggested checklists or action plans intended to include or address all possible risk management exposures or solutions. You are encouraged to retain your own expert consultants and legal advisors in order to develop a risk management plan specific to your own activities.