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HO1 Basic Form

By Mike Heuer

An HO1 homeowners insurance plan is known as a “basic” coverage insurance plan to protect homes and other properties against several named perils. A peril is a potential loss-causing agent, such as fire, that can result in a partial or total loss. As with other property and casualty insurance plans, a deductible would apply as chosen by the policyholder and acts to keep rates down as well as reduce the potential for small claims being filed. Liability coverage also is provided.

Because most homeowners need more than basic coverage for their homes and properties, many states no longer allow property and casualty insurers to underwriting only HO1 homeowners insurance plans. But in those states that do allow the insurance plans to be underwritten and sold to consumers, there are 11 standard perils the basic policy will protect against.

The first peril is fire or lightning, which could result in a partial or total loss of the insured home. As should be expected, arson is not covered by the fire portion of the HO1 basic homeowners insurance plan. But fires caused by unintentional acts are covered by home insurance policies up to their coverage limits.

In the case of fire, homes rarely are struck by lightning, but indirect lightning that strikes a utility pole or line, for example, can travel into a home and cause significant damage. Direct lightning strikes on houses occurred about 186,000 times during 2008 with Florida ranking at the state in which a home is most likely to suffer a direct lightning strike, according to the Insurance Information Institute. A lightning bolt can reach a 50,000 degrees and ignite a home in an instant if it is not protected.

Other perils covered by basic homeowners insurance include smoke damage, losses caused by windstorms or hail, and an explosion. Sometimes, a gas line might become ruptured, whether inside the home or outside if a construction crew is working nearby and not all gas lines have been identified and marked, for example. A resulting explosion could prove disastrous.

Although rare, damages or destruction caused by a riot or civil commotion also would be a covered peril, as would damage caused by an aircraft crashing into a home of losing a part or cargo that lands on a home. If a vehicle were to crash into home or cause some sort of damage, that also would be covered by a basic homeowners insurance plan.

Glass breakage can be a common and costly repair as could damages or destruction caused by vandals or people acting in a mischievous manner. Whether the damage occurs inside the home or to other parts or the insured property, such as trees, a basic homeowners plan would replace or reimburse the policyholder up to coverage limits.

Theft also is a standard peril for which coverage is provided in basic homeowners insurance plans. Many homeowners have the misfortune to suffer a home invasion or lose things due to some other form of theft, and a policy will repair or replace damages arising from such incidents.

Although rare, volcanic eruption is another peril named in basic homeowners insurance plans and do come in handy when living near even a dormant volcano, as unfortunate homeowners near Mt. St. Helens in the state of Washington learned 1980. And homeowners in Hawaii already are familiar with the benefits of having protection against volcanic eruption.

The 11 standard perils often are not enough to completely protect homes in most states, which is why many do not allow HO1 policies to be sold there. In such states, an HO2 homeowners plan is the most basic policy approved by state insurance officials.