Home Insurance: What is Broad Form Property Coverage?
When it comes to protecting your home, having the right insurance coverage is crucial. Various types of home insurance policies are available, each offering different levels of protection. One option that strikes a balance between good coverage and affordability is broad form insurance. In this article, we will delve into the details of broad form insurance, exploring its coverage, advantages, and considerations.
What is Broad Form Insurance?
Broad Form Insurance at a Glance:
- Your House (Dwelling Coverage):
This provides “All-Risks” protection. Essentially, your home and its structure are covered for almost anything that could happen, unless the policy specifically lists it as an exclusion (something the insurance company won’t pay for, like wear and tear). - Your Belongings (Contents Coverage):
This uses “Named Perils” protection. This means your personal items are only covered against a specific list of risks. If a risk (like fire or theft) isn’t explicitly written in that list, it isn’t covered.
Under a broad form insurance policy, the dwelling, which includes the main house and attached structures, is protected from a comprehensive range of risks. The real difference is that with a broad form, you have less coverage for your contents.
It’s a trade-off that can save you money on your premium, but you take on more risk for your personal property.
Coverage Options in Broad Form Insurance
Dwelling Coverage
It’s the part of your insurance that focuses on protecting the actual structure of your home, the physical building itself. This typically includes the main house and any structures permanently attached to it, like a garage, deck, or porch.
It is important to note that certain perils are typically excluded from coverage, such as damage caused by settling, earth movement, and water seepage. These exclusions are not considered losses resulting from sudden or unexpected events covered by the policy.
Contents Coverage
This refers to virtually everything inside your home that isn’t a permanent part of the structure. It’s the personal property you own and would likely take with you if you moved. Common examples include:
- Furniture: Your couch, beds, tables, and chairs.
- Electronics: TVs, computers, sound systems, and other gadgets.
- Appliances: Microwaves, toasters, and any other appliances that aren’t built-in.
- Clothing & Personal Items: Your wardrobe, shoes, and other everyday belongings.
With a Broad Form policy, the coverage for your personal belongings works differently from the protection for the physical house. This part of the policy uses a “Named Perils” model, meaning your items are only protected against specific, explicitly listed risks.
Special Limits & Coverage Differences
It is important to note that for high-value items like jewelry, bicycles, and works of art, Broad Form coverage differs significantly from a Comprehensive policy.
To understand how these specific items are protected and where limits may apply, please visit our guide: Understanding Special Limits.
Advantages of Broad Form Insurance
Broad form insurance offers several advantages, making it an attractive option for homeowners. Some key benefits are:
Key Benefits of Broad Form Insurance:
↔️ Swipe or scroll right to view all coverage details
| Feature | Broad Form |
|---|---|
| Building Structure | All-Risk (See definition below) |
| Your Belongings | Named Perils (See list below) |
| Accidental Damage | Coverage Limited to Building Only |
What exactly are “Named Perils”?
Under a Broad Form policy, your property is only insured for damage caused by specific events listed in your policy. If it’s not on the list, it’s not covered. These standard events include:
- Fire or Lightning
- Explosion or Smoke
- Theft or Attempted Theft
- Vandalism or Malicious Acts
- Windstorm or Hail
- Falling Objects (e.g. a tree)
- Impact by Aircraft or Vehicle
- Electricity (Sudden surges)
- Water Escape (Plumbing)
- Riot
What is “All Risk” Coverage?
Under a Comprehensive Form, your coverage moves from “Named Perils” to “All Risk” (often called All-Perils). Instead of a limited list of what is covered, “All Risk” means that loss or damage from any external cause is covered, UNLESS the policy specifically lists that cause as an exclusion.
Think of it this way: With Named Perils, the burden is on you to prove the damage was caused by a listed event. With All Risk, the burden is on the insurance company to prove that the cause of damage is excluded by the policy wording.
Considerations for Broad Form Insurance
Before selecting broad form insurance for your home, it is important to consider a few key factors:
Important Factors to Consider:
- Value of Contents: Assess the value of your personal belongings to determine if the named perils coverage offered is sufficient. If you have high-value items that require broader coverage, you may need to consider additional insurance options.
- Exclusions and Limitations: Familiarize yourself with your insurance policy’s exclusions and limitations. Understand what perils are excluded from coverage and ensure that you are comfortable with the level of protection provided.
- Comparison Shopping: As with any insurance policy, you should ask your insurance advisor whether there are differences in the broad form coverage offered by each insurer. For example, one insurance company may offer higher limits of included coverage for jewellery, watches and other high-value items than others.
FAQs
What is the difference between broad form and comprehensive insurance?
Broad form insurance provides comprehensive coverage for your dwelling but only named perils coverage for your contents. Comprehensive insurance (sometimes called all-risk) offers the highest level of protection, covering both your dwelling and contents against all risks except those specifically excluded in the policy.
Are valuables like jewelry fully covered under broad form insurance?
Most broad form policies have special limits for high-value items like jewelry, collectibles, and electronics. If your valuables exceed these limits, you may need to purchase additional coverage through endorsements or riders to ensure they’re adequately protected.
Does broad form insurance cover water damage?
It depends on the cause. Sudden and accidental water damage from plumbing issues is typically covered for the dwelling under broad form insurance. However, water damage to contents may only be covered if it results from a named peril. Coverage for overland flooding, sewer backup, or groundwater usually requires additional endorsements.
Who should consider broad form insurance?
Broad form insurance is ideal for homeowners who want strong protection for their dwelling while being cost-conscious. It’s particularly suitable for those whose home value significantly exceeds their contents value, or who have fewer high-value personal belongings that would benefit from comprehensive coverage.
Important Notice: The scenarios provided above are for illustrative purposes only. In the event of any discrepancy between this article and your insurance policy, the actual policy wording and documentation prevail. Always refer to your specific contract for precise coverage details, including conditions, definitions, and exclusions that apply to your individual insurance.
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Posted in Home & Tenant on November 18, 2021 by Harvard Western Insurance
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