The Ultimate Home Insurance Guide

Everything You Need To Know To Better Understand Home Insurance

Whether you need answers to these questions or just want an home insurance quote, you’ve come to the right place

What Does Homeowners Insurance Cover?

Homeowners Insurance is designed to protect one of a family’s largest assets…their home.

The standard Home Insurance policies provide coverage for a few major things

  • Property Damage To Your Home (the actual building)
  • Property Damage To Your STUFF
  • Personal Liability associated with your home and property

Insurance Carriers have created policies that combine a number of common features into what they call:

Homeowners Insurance Policy Forms

Are There Different Home Insurance Policy Types?

In North Carolina, there are really only 2 Main Homeowner’s Insurance Policy Forms.

  • Homeowners Policy Form 3 – HO3
  • Homeowners Enhanced Form – HE7

Both of these policy forms are meant to cover Owner Occupied single family homes.

While the policy forms are similar, there are distinct differences you should be aware of.

The HO-3 Form may be used to provide coverage on a single family home or townhouse. Coverage is normally provided under the Special Form as follows:

  • Coverage A (Dwelling) – Minimum amount determined by individual carrier
    Coverage A provides coverage for the actual “structure” if it is damaged by certain events. Coverage A also provides coverage for certain fixtures within home such as the plumbing, electrical, and HVAC system. Most Insurance Contracts dictate that you insure the structure to a minimum of 80% of the “Replacement Cost” of the home.
  • Coverage B (Other Structures) – 10 Percent of Coverage A
    Coverage B provides coverage for other structures on the premises that are not attached to the primary dwelling. Coverage B is normally limited to 10 percent of the Coverage A limit. However, additional coverage can be purchased if needed.
  • Coverage C (Personal Property) – 50 Percent of Coverage A
    Coverage C provides coverage for your personal belongings or the belongings of of your family members who live with you. Coverage C is normally 50 percent of Coverage A (if coverage is also provided for the dwelling under the policy). There are limitation for certain types of “personal property” within the standard policy.
  • Coverage D (Loss of Use) – 20 Percent of Coverage A
    Coverage D provides coverage that will help with additional living expenses if your home is damaged by a covered cause of loss. Coverage D is normally 20 percent of Coverage A.
  • Coverage E (Personal Liability) – Minimum Coverage of $100,000
    Coverage E provides coverage in the event you or a resident of your household are legally responsible for injury to others. This coverage will not protect you in the event of an intentional act.
  • Coverage F (Medical Payments) – Minimum Coverage of $1,000
    Coverage F pays for reasonable medical expenses for persons accidentally injured on your property.

 

The HE-7 Form (with the HE-21 Extended Enhancement Endorsement) is the most complete Homeowners Form in North Carolina today. At ALLCHOICE, we refer to the HE-7 (w/ HE-21) as a “regular homeowners form (HO-3)” on steroids! Coverage is normally provided under the HE-7 Form as follows:

  • Coverage A (Dwelling) – Minimum amount determined by individual carrier (typically higher minimum than the HO-3)
    Coverage A provides coverage for the actual “structure” if it is damaged by certain events. Coverage A also provides coverage for certain fixtures within home such as the plumbing, electrical, and HVAC system. Most Insurance Contracts dictate that you insure the structure to a minimum of 80% of the “Replacement Cost” of the home.
  • Coverage B (Other Structures) – 20 Percent of Coverage A
    Coverage B provides coverage for other structures on the premises that are not attached to the primary dwelling. Coverage B is normally limited to 10 percent of the Coverage A limit. However, additional coverage can be purchased if needed.
  • Coverage C (Personal Property) – 70 Percent of Coverage A
    Coverage C provides coverage for your personal belongings or the belongings of of your family members who live with you. Coverage C is normally 50 percent of Coverage A (if coverage is also provided for the dwelling under the policy). There are limitation for certain types of “personal property” within the standard policy.
  • Coverage D (Loss of Use) – 20 Percent of Coverage A
    Coverage D provides coverage that will help with additional living expenses if your home is damaged by a covered cause of loss. Coverage D is normally 20 percent of Coverage A.
  • Coverage E (Personal Liability) – Minimum Coverage of $100,000
    Coverage E provides coverage in the event you or a resident of your household are legally responsible for injury to others. This coverage will not protect you in the event of an intentional act.
  • Coverage F (Medical Payments) – Minimum Coverage of $1,000
    Coverage F pays for reasonable medical expenses for persons accidentally injured on your property.

Should I choose the HO-3 of the HE-7? (PDF)

Guaranteed Replacement Cost Coverage

Guaranteed Replacement Cost Coverage provides for the Replacement Cost Settlement of your home in the event of loss. If your policy has been endorsed with this coverage, the insurance company will pay the difference between what your house is insured for and the actual amount it costs to rebuild the home (subject to certain limitations).

Replacement Cost Coverage (Add’l 25% or 50%)

Replacement Cost Coverage provides for the Replacement Cost Settlement of your home in the event of loss. If your policy has been endorsed with this coverage, the insurance company will pay the difference between what your house is insured for and the actual amount it costs to rebuild the home up to an additional 25% or 50% (depending on the endorsement) should the reconstruction exceed the Dwelling Limit stated on the declaration page.

Personal Property Replacement Cost

Personal Property Replacement Cost Coverage extends the replacement cost settlement to Coverage C of your policy. There are certain limitations, so be sure to ask your agent for further information.

Scheduled Personal Policy (Scheduled)

This is endorsement specifically covers “high value” items that tend to be more mobile than most items of Personal Property. Most often, this endorsement is thought of in terms of insuring jewelry!

Watercraft Endorsement

The Watercraft Endorsement extends the liability coverages provided under Coverage E & F if your policy.

How Much Does Home Insurance Cost In North Carolina?

Home Insurance Premiums vary greatly across the state of North Carolina. In general, North Carolina’s Homeowners Rates are middle of the road when compared to the rest of the nation

Average Home Insurance Premium in 2020

National Average Home Insurance Premium:  $948

North Carolina AverageHome Insurance Premium: $857

Source: thesimpledollar.com

The actual home insurance premium depends on a number of factors, accordingly, the premiums you pay will vary greatly as well.

How Are Home Insurance Rates Calculated?

Home Insurance Rates Are Calculated different from carrier to carrier, but in general, the following factors are used by most companies.

  • Location
  • Year Of Construction
  • Type Of Building Construction
  • Size Of Home
  • Credit History
  • Claims History
  • Other Insurance With The Same Carrier
  • Deductible

Most carriers will use the above-mentioned criteria as a starting point for calculating an accurate Home Insurance Rate.

 

Do I Need NC Home Insurance?

North Carolina Homeowner’s Insurance is one of the most important types of policies available. More than likely, your home is the largest investment you will ever make. Finding and obtaining the right NC Homeowners Insurance Coverage is important. The fact is, you have numerous choices when deciding exactly how to protect your home. If you don’t own a home, you still need some of the same protections as those who do.