Homeowners Insurance covers you for many losses including theft, fire, water damage, along with liability protection. There are a number of policies but the most prevalent is the HO-3 ISO form. Travelers and The Hartford use the form but Farmers, State Farm, and Allstate have proprietary forms but incorporate language and sections from the HO-3. Every Homeowner policy will consist of these sections:

Declarations-DEC page provides summary of coverages and limits. This is usually the first page and will list named insured, effective date and policy term, coverage types, limits, premium, deductible. It is a good summary but is incomplete without the entire policy.

Definitions-This will define words in the policy contract that are in quotation marks or highlighted.

Coverage Section-Explains what property or liability falls within the scope of the policy.

Insuring Agreement-Explains what is covered.

Conditions-Explains what stipulations are required for coverage, how property is valued, how payments are distributed, and other policy conditions.

Exclusions-Explains what is Not covered on the policy.

Endorsements-Ranges from adding or removing coverage, deductible changes, state mandated form, and other important policy changes.

The easiest way to understand the policy is by break it down into the Property and Liability sections.


Your house has a foundation, four walls, and a roof. Inside you have a kitchen, bathroom, bedroom, among other rooms. There are also electrical wires and circuits, heating and cooling systems, pipes, lines, ext. This is considered the Building, Coverage A Dwelling. Your policy will have a Building Limit which states the amount the insurance company will pay in a complete loss. They ITV or TIV (Total Insured Value) is also how the premium is determined. The higher that limit, the higher the premium.

Inside the house you also have your property. This is considered Personal Property or Contents. This includes your TV, clothing, bed, furniture, jewelry, toaster, ext. Essentially, if you flip the house over and it falls out, then it's considered Contents. This is usually set at 70% of the Building Coverage.



The Liability portion of your policy is Third Party Coverage. You, are the First Party, and that means Third Part Coverage is when another party, person, or entity brings a Claim or law suit against you. This can be if someone slipped and fell on your property, if you provided alcohol and they caused harm or harmed themselves after, or if you damaged someone else property; law suits, Bodily Injury, or Property Damage.

Bodily Injury is defined in the HO-3 as

"Bodily injury" means bodily harm, sickness or disease, including required care, loss of serv- ices and death that results.

Property Damage is defined in the H0-3 as

"Property damage" means physical injury to, destruction of, or loss of use of tangible property.