Ho3 Policy: Exclusions You Won’t Believe

Insurance clients have real concerns. What better way to address those concerns but through letters.

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Dear Mr. I Want an HO3 Policy Dude,

Congratulations on buying a beautiful new home!

Now it’s time to protect your investment and acquire homeowners insurance in case some country nukes the planet or little Johnny’s science experiment involves setting fire to the drapes. Oops, my bad. War and nuclear incidents are a couple of HO3 policy exclusions.

Nuclear disasters aside, look no further than an Ho3 policy to save-your-tushy should a covered misfortune occur. You are probably wondering what an Ho3 policy is, what it covers, and what catastrophes (perils) it protects. While insurance lingo may be as exciting as clipping one’s toenails, I assure you that understanding the basics is worthwhile.

For starters, there are many types of homeowner’s policies: Ho-2, Ho-3, Ho-Ho-Ho (during Christmas), and Ho-5 (hybrid of a Ho-3). Okay, at this point, if you’re about to have a panic attack because you are becoming overwhelmed by all the HO’s, call 911 or contact us today!

Have You Considered Perils?

So, you’ve found the perfect house. Visions of Chinese takeout, unending parties, and the freedom to roam in less-than-casual wear, fill your head as you finish setting up the big-screen. With your favorite show playing, you notice the sky turning an eerie black.

As you move through the house in your Scooby-Doo slippers, you hear a rumble. “It’s just a storm,” you tell yourself. Then a giant lightning bolt crashes down, and the TV sputters out. You immediately think, “Good thing I have that ho3 policy.”

The benefits of homeownership are great but consider the perils. Now, say that your new location is surrounded by healthy trees that may collapse onto the place; a basement that could flood from a sudden pipe burst; or teenagers that might graffiti your house. Maybe Santa Clause will destroy your chimney annually due to his slight obesity. Maybe, maybe, maybe.

So, what ever should you do? Well, silly, get a reliable HO3 policy and sleep soundly because these perils are covered (not sure if Santa is covered under a HO3 policy though). By the way, to help you sleep even more soundly, get a mouth nightguard too. Your gums will thank you. You’re welcome.

HO3 Policy Explained

An HO3 policy protects you, your family, and your property against various calamities. An HO3 policy is insurance jargon for a basic homeowner’s insurance policy. It’s a contract between you and your insurer to protect your home. In exchange for your premium, the insurer has your back when the gas grill explodes, a drunkard crashes into your house, or a cannonball collapses through the roof.

When things don’t go your way or when the world is beating you down, the insurer is there to pick you up, dust you off, and give you a bagel with your favorite smear. Actually, the insurer might not solve all of life’s problems, or even give you a bagel, but the insurer will take care of covered damages. That’s great! This means that after a calamity, you may not have to move in with your mother-in-law!

Homeowners insurance is usually required if you have a mortgage or a bank loan. That’s because it protects you and the bank’s investment by repairing damages to your home. Aside from that, getting insurance for one of the most significant investments you’ll make in a lifetime is pretty much a no-brainer. It allows you to rest easy, knowing you’re protected when s*** “stuff” hits the fan.

So, feel free to take that family vacation to the hidden islands, because your personal items are insured anywhere in the world. If you get back to that private vacation bungalow that you rented and discover that both your “lazy time” ukulele and credit card are missing, just relax and get back out there to the beach. The insurance company will cover up to $500 for unauthorized use of your credit card and the ukulele is also covered.

Well, you had a great vacation and it was fun while it lasted. When you arrive home, you discover that the neighborhood arsonist torched your residence. The tenant who rents out part of your home tried to contact you in the hidden islands but you were too busy, well, relaxing and trying to conquer limbo, so you didn’t bother to answer his calls. Never fret, there is a silver lining for this cloud. Sure, the tenant had to move out but your insurance will reimburse you for the lost rent. The insurance company will also pay your hotel bills, restaurant meals and other costs incurred, outside of your normal living expenses, while your home is being repaired (with limits of course).

The new home is finally under construction. Once the garage of the new home is completed, you decide to move your items out of your rented storage unit into the garage. Once a week, the builder has a service stop by the construction site and remove debris. The items in the garage were “mistaken” as debris and hauled away and disposed. The builder and the debris hauler refuse to take responsibility. The insurance company won’t help you either. Claim denied because items in buildings under construction are on the list of HO3 policy exclusions.

Let’s look at some of the perils that an Ho3 policy does cover.

Ho3 policy: Covered Perils

A standard HO3 policy offers coverage for these 16 named perils:

Fire or lightning
Vehicles (not your own)
Falling Objects
Volcanic Eruption
Windstorm or Hail
Riot or Civil Commotion
Damage caused by Aircraft
Vandalism or Malicious Mischief
Damage due to weight of Ice, Snow, or Sleet
Sudden & Accidental Tearing Apart, Cracking, Burning, or -Bulging
Sudden & Accidental Damage from Artificially Generated Electric Current
Accidental Discharge or Overflow of Water from Plumbing, Air conditioning, etc.

Be mindful though. If some unsavory character breaks in and decides to steal all of your cash, that priceless ring that was given to your wife by her grandmother, and your “stand your ground” collection of firearms, you might not get fully reimbursed for the value of these items. The HO3 policy has what is known as an inside limit. An inside limit is the maximum amount that you will receive for certain items even if the overall policy itself has a higher limit.

Yippee, you just got reimbursed for that $2,500 of stolen cash! Booooo, you only received the $200 reimbursement limit. As you can see, you won’t be able to claim that there was a million dollars under the mattress and get fully reimbursed for it. Sorry.

Speaking of millions, somehow you managed to get your hands on an original Picasso (aren’t you “the man”). Unfortunately, little Johnny is at it again. He decides that he is also an “artist”. Johnny adds his own finishing touches to your great treasure, calls it “Picasso a la Johnny” and proudly shows it to you. After sending Johnny off to military school, you contact the insurance company and learn that this type of damage is included in the HO3 policy exclusions section. Darn that kid! By the way, if your only remaining child at home, cute little Susie, accidentally smashes any of your other fine art or antiques, it won’t be covered under the HO3 policy either.

Whew, good thing Cousin Lennie arrives to comfort you for your lose (over the painting, not the kid). It feels good to be able to talk about it incessantly. Turns out, though, that Cousin Lennie may have had an ulterior motive for his kindness. Two months after Cousin Lennie’s sudden departure from your home, you finally notice that several items seemed to have mysteriously disappeared from the residence. Lennie (you declare he is no longer related to you) exclaims that you can’t “prove” that he took $37,324.43 worth of your things!

You call the insurance company about your newly discovered loss. Their response, “Sorry Sir, you are out of luck with insurance recovery. An HO3 policy excludes mysterious disappearances. We did notice, however, that your premium is due next week. Would you like to make a payment today?”

At least you can always find REAL comfort with the family dog, Roscoe. Unlike Lennie, Roscoe is truly like family. Too bad Roscoe doesn’t feel the same way about you. He left you. He ran away to parts unknown. It looks like he finally made his escape. Roscoe was a pure breed and cost you a lot of money. Time to use the HO3 policy again to recover the cost of Roscoe. You yell to your wife that Roscoe is gone and ask her to contact the insurance company. She yells back, “Um, no. Under an HO3 policy, animals aren’t covered for theft, damage, or loss.” You decide that the local animal shelter is a good place to ADOPT your next Roscoe.

A few weeks later, Roscoe magically reappears. Due to his jealousy over the newly adopted pet that he sees happily playing in your yard, Roscoe bites a neighbor kid. Your neighbor shows up on your doorstep accompanied by Roscoe and the neighbor’s promise of a lawsuit. Double great news! The bite might be covered under your HO3 policy and Roscoe is home! Double bad news. You now have two dogs named Roscoe and during his “great escape”, Original Roscoe somehow busted through your front door like the Kool-Aid Man and destroyed the door, which isn’t covered under the HO3 policy. Your dog. Your door. Your problem.

Through all of your troubles, you are still all, “don’t worry, be happy” because you are otherwise enjoying your lakeside living. You absolutely love, love, love living right on the lake. (Cue the impending doom music).

You wake up one morning after a windstorm and now part of the lake has moved into your home and flooded it. Trees and shrubs were blown around like tumbleweeds. Your home looks like a war zone and there’s no power! The power is restored two days later but the food in the refrigerator is ruined. You saw up some of the trees to use as firewood later. You are left to rent a wet dry vac and spend a week sucking up all the water from your home. After another week of airing out the house with industrial sized fans, all seems well.

Of course, several months later you notice a lot of mold and dry rot around the home (guess you didn’t do a great job with the wet dry vac). No reimbursement for the ruined food; no replacement of the trees and shrubs; no reimbursement for the equipment rental; and the insurance company won’t remedy the mold or dry rot. Why can’t you get reimbursed you ask? Well, HO3 policy exclusions include water damage from a flood whether driven by wind or not. Any damage as a result of an excluded peril, is also not covered. This revelation is really causing you to question the value of your HO3 policy AND lakeside living.

The HO3 policy is the most popular among homeowners. It is affordable and offers coverage against most of the common perils. The limitations of an HO3 policy can be surmounted if additional endorsements are added to the basic coverage. For example, some carriers offer flood endorsements. Endorsements, however, will increase the costs of your HO3 policy.

This letter does not include every possible peril. I just wanted to provide you with a general idea of the covered perils of an HO3 policy. This letter is not an all inclusive guide. Always consult with your agent about what is actually included in your specific policy.

If you’re ready to purchase an Ho3 policy or any other homeowner policy in Texas, feel free to fill out your information for free no obligation quotes. A licensed agent will be assigned to you and will provide you with a minimum of 3 HO3 policy quotes from 3 different companies. The agent will work with you to find what fits your lifestyle the best. You then can decide which company offers you adequate coverage and the agent will help you obtain a policy.

Most of all, enjoy your new home, and the non-perils that come with it!

Forever Twisted,


“I called an insurance company to get a quote. They gave me one of Oscar Wilde’s best.”

― Jarod Kintz, $3.33

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