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HO-3 or HE-7/21 Which Policy is Right for You?

North Carolina homeowners have two basic choices when it comes to home insurance. You can choose between an HO-3 or HE7/21 policy. Knowing the key differences between the two is the foundation for getting the coverage you need, in line with your budget. This handy side-by-side comparison will help you understand the main characteristics of each policy type

CoverageHO-3 PolicyHE7/21 Policy
Replacement cost coverage on dwelling (cost to rebuild back to pre-loss condition)Optional for an additional charge, 125%-150% capGuaranteed (full) replacement cost coverage
Replacement cost coverage on contents (no depreciation taken)Optional for an additional chargeIncluded
Contents-covered perilsNamed perilsAll risk
Law & OrdinanceCaps at 10% of coverage on dwellingCaps at amount of coverage on dwelling
Primary mortgage expenseNot AvailablePays the first mortgage payment while the residence premises is not fit to live in due to a covered loss, for up to 12 months/payments; part of Loss of Use coverage.
Watercraft$1500$2500
Trailers$1500$3500
Money sublimit$200$1000
Securities sublimit$1500$5500
Business personal property, on premises$2500$5000
Business personal property, away from premises$500$1500
Credit card/fund transfer card forgery$500$5000
Jewelry sublimit$1500 (theft only)$5500 (theft, misplacing or losing, $1500 per item limit)
Firearms sublimit$10,000 (theft only)$10,000 (theft, misplacing or losing)
Silverware sublimit$10,000 (theft only)$10,000 (theft, misplacing or losing)
Land coverageNot availablePays up to $10,000 to replace, stabilize, or rebuild the land necessary to support the dwelling or other structure as a result of a covered loss. This is additional insurance and no deductible applies.
Water back-up of sewers or drainsOptional for additional chargeAutomatic coverage for up to $50,000; optional for up to policy limit at $25 charge.
Loss assessment$1000$5000
Personal injuryOptional for an additional chargeIncluded
Lock replacementNot available$500 (if keys are stolen)
Debris (tree) removal$1000 for any one occurrence, regardless of the number of fallen trees$2000 for any one occurrence with a $1000 limit per tree
Reward coverageNot available$2500 leading to the arrest and conviction of the person committing the crime, resulting in a loss and $5000 for the return of stolen covered property. This coverage is additional insurance.
Witness expenseNot available$250/day loss of earnings and $50/day expenses up to a max of $3000 to appear as a witness in court to prosecute person charged with committing a crime against insured’s property resulting in a covered loss. This is additional insurance and no deductible applies.
Directors & officers coverageNot availableAffords liability coverage up to policy limits when an insured acts in the capacity of an unpaid director or officer of a not-for-profit corporation or organization.
Deductible waived on losses exceeding $50,000Not availableIncluded
Property in vault coverageNot availableProvides a single maximum limit of $50,000 for loss to or theft of silverware, jewelry, and/or securities in any one occurrence when such property is in a safe deposit box stored in a bank vault.
Trees, shrubs, other plants coverage$500 per plant limit$1000 per plant limit
Fire department service charge$500$1000
Power interruption coverageNot availableProvides for loss of use for up to 7 days beginning after the first 2 days of loss of use.
Business pursuits of minorsNot availableLimit of liability applies to insured minors involved in occasional or part-time, self-employed business pursuits normally undertaken by minors.

Whether HO3 or HE-7/21, Tom Needham will find you the perfect policy

Whichever policy best suits your needs and budget, Tom Needham Insurance will help you put together the ideal home insurance policy.

Call us now at 336-855-1223> or contact us for a homeowner’s insurance quote online and one of our agents will be in touch with you shortly.