What Does Your HO3 Policy Say About Perils and Deductibles? - Olympus Insurance (2024)

Your homeowners insurance policy is designed to protect your investment on your home. However, not all policies are the same, and coverages can vary from carrier to carrier. Knowing what your policy says about specific circ*mstances and risks, and what to expect in case of a loss, can help you make an informed decision about your coverage.

In the language of the homeowners insurance industry, “perils” are the circ*mstances which can cause a loss. HO3 policies can either cover damage caused by Named Perils only, which means that only circ*mstances specifically outlined in the policy are covered, or All Risk, meaning all circ*mstances are covered except for those specifically excluded in the policy.

Named Perils

For most Floridians, a standard (HO3) homeowners policy covers a range of Named Perils which typically include:

• Weather events: lightning, windstorms, hailstorms, and named storms or hurricanes
• Other events: explosions, falling objects, fire, smoke, or volcanic eruption
• Acts committed by others: theft, vandalism, malicious mischief, riot, or civil commotion
• Damage caused by vehicles: cars, aircraft, unmanned drones

Unless specifically named as covered, losses from all other situations are assumed to be not covered.

All Risk

An All-Risk policy will usually have higher premiums but can cover an even wider range of perils, including:

• Damages typically not covered without an endorsem*nt or rider: flood, sewer backup, sump pump failure, or personal property damage caused by wind-driven rain
• Situations related to construction: building ordinance or law stipulations for repair or rebuilding after a loss, or theft of building materials and supplies
• Changes to terrain: earth movement, earthquakes, or sinkholes
• Losses due to off-premises utility service interruption: refrigerated items such as food or other perishables

An alternative to an expensive All-Risk policy is to add a comprehensive rider to a Named Peril policy. Olympus offers exclusive access to optional Spartan Enhanced Coverage to provide many extra protections.

Deductibles

There are two types of HO3 policy deductibles – one for hurricanes, and another for All Other Perils. Deductibles for All Other Perils can vary depending on a wide range of factors but can usually be lowered by increasing the monthly premium. Conversely, premiums can often be lowered by accepting a higher AOP deductible.

Hurricane deductibles are typically set at 2% of the insured value of the home. A home with an insured value of $350,000 would carry a $7,000 deductible. Olympus Insurance offers flat rate $500 and $1,000 hurricane deductibles as an option for Florida homeowners, reducing their risk of a high out-of-pocket cost in case of a catastrophic weather event.

Ask your agent about what perils are covered under your HO3 policy, what endorsem*nts are available, and how to adjust your deductibles and premiums to find the right balance of coverage and cost for your family.

This article is for informational purposes only and does not form a part of, replace, change or amend any terms, conditions, provisions or language within your Olympus Insurance policy. We encourage you to read your entire policy.