For people who own their home, the HO-3 is a comprehensive insurance policy which provides coverage for dwellings as well as for personal property. This policy extends coverage to several additional types of claims that may not be covered in other policies.The policy may be amended to cover additional risks such as increased limits for more valuable items or a home based business.
The HO-3 pays full replacement cost without depreciation provided insurance is adequately maintained. Replacement value should not be confused with market value. It is Construction cost normally determined on a per-square-foot basis. Insurance companies will assist you, through your agent, with cost estimates that will help you and your agent determine the replacement of your property.
If your home has been damaged or destroyed by fire or other insured hazards, making it unfit to live in, the policy provides coverage for increases in necessary living expenses incurred so that your household can maintain its normal standard of living. With the emotional trauma that can accompany such an event, it is comforting to know that this option may exist.