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For Homeowners Insurance, Georgia Residents Have Many Options

By Mike Heuer

Georgia is one of many states that does not authorize the sale of the most basic level of homeowners insurance plans, an HO-1 policy. But its residents do have many options, starting with the HO-3 broad form and the potential to add many endorsements, which makes the policies very comprehensive as well as potentially affordable with the ability to tailor coverages for specific needs.

There essentially are two types of HO-3 homeowners insurance Georgia homeowners can buy. One is for traditional framed homes constructed of wood and similar materials while the other is for veneer-constructed homes, such as bricks, stones and masonry on their exteriors. With endorsements, the policies can provide comprehensive protection against a wide range of perils for relatively affordable rates.

And those who live in the Atlanta area have good news awaiting at renewal time with their rates likely to go down due to a recent change in the city’s ISO rating. The Insurance Services Organization (ISO) after 2009 had listed the Atlanta area with a Class 3 based on its public protection category, which assesses a community’s ability to provide emergency services and mitigation efforts for various disasters.

Since 2009, Atlanta officials have improved public protection services, including firefighting services, resulting in the improved rating that just took effect in September 2013. Home insurers have up to 90 days to respond to the new rating, which typically lowers the cost of homeowners insurance Georgia residents in Atlanta need to protect their family homes, condos and rental units. So many homeowners should see their rates going down if they live in Atlanta or nearby.

Another enhancement for Georgia homeowners is the increased protection the Georgia Supreme Court has given to homeowners regarding a contractor’s general liability policy. The court ruling increases the scope of liability policies taken out by contractors to include damages caused by faulty construction methods. It gives homeowners more rights to be indemnified by a contractor’s general liability insurance coverage even if the contractor declares bankruptcy or otherwise cannot pay the damages claims for which the contractor is at fault.

The decision was delivered to resolve a class action lawsuit involving more than 400 homeowners in Georgia who sued a large, multistate contractor, Taylor Morrison, claiming the firm built faulty foundations that had defects and cracks and proved too weak to support the homes built upon them. The contractor’s insurance company tried to fight the case under the pretense that claims only could be filed and settled for occurrences, which the insurer, HD-Gerling, said did not apply since the contractor built the homes as well as the foundations.

Because the damage was not caused by an accident and did not result in actual damages to the homes, only the foundations as well as some driveways and walkways, the owners did not suffer a loss as defined by the contractor’s general liability policy. A loss would have to be caused by an accident or continued exposure to the same harmful condition, which did not occur, according to the insurer.