Connecticut Homeowners Insurance

Connecticut homeowners insurance combines standard ISO coverage forms with state-specific requirements and endorsements, particularly for coastal properties along Long Island Sound.

Standard Homeowners Forms

Connecticut insurers use Insurance Services Office (ISO) standard homeowners forms:

HO-3 Special Form (Most Popular)

Open Peril vs. Named Peril:

• Open Peril (Special): Covers ALL risks except those specifically excluded (broader)
• Named Peril: Covers ONLY the perils specifically listed in the policy (narrower)

Exam Tip: HO-3 is the most popular homeowners form in Connecticut. Know that Coverage A and B are open peril, while Coverage C is named peril.

HO-2 Broad Form

The HO-2 Broad Form provides named peril coverage for all coverages:

16 Named Perils Covered:

1. Fire or lightning
2. Windstorm or hail
3. Explosion
4. Riot or civil commotion
5. Aircraft
6. Vehicles
7. Smoke
8. Vandalism or malicious mischief
9. Theft
10. Falling objects
11. Weight of ice, snow, or sleet
12. Accidental discharge or overflow of water or steam
13. Sudden and accidental tearing apart, cracking, burning, or bulging
14. Freezing
15. Sudden and accidental damage from artificially generated electrical current
16. Volcanic eruption

When HO-2 is Used:

• Lower premium alternative to HO-3
• Properties with higher risk profiles
• Older homes or homes with unique features
• Budget-conscious homeowners

HO-4 Contents Broad Form (Renters)

HO-4 is designed for renters/tenants:

No Coverage A or B: Landlord insures the building

HO-6 Unit-Owners Form (Condos)

HO-6 is designed for condominium unit owners:

Coverage Structure:

• Coverage A: Limited to unit improvements and betterments ($1,000 minimum)
• Coverage C: Personal property (named peril)
• Coverage D: Loss of use (40% of Coverage C)
• Coverage E: Personal liability
• Coverage F: Medical payments

Condominium Association Master Policy:

• Covers building structure and common areas
• HO-6 fills gaps in master policy coverage
• Covers unit interior improvements by owner
• May include loss assessment coverage

Exam Tip: HO-6 policies coordinate with the condominium association's master policy. The master policy typically covers the building shell, while HO-6 covers unit contents and improvements.

Connecticut Coastal Property Challenges

Hurricane and Windstorm Risk

Connecticut's 158-mile coastline along Long Island Sound creates unique property insurance challenges:

Coastal Risk Factors:

• Hurricane Exposure: Category 1-3 hurricanes affect Connecticut coast
• Nor'easter Storms: Frequent winter storms with high winds and coastal flooding
• Storm Surge: Long Island Sound amplifies storm surge impacts
• Beach Erosion: Ongoing coastal erosion threatens properties
• Flood Risk: National Flood Insurance Program (NFIP) coverage essential

Hurricane Deductibles

Special Hurricane Deductible Rules:

Properties located within 2,600 feet of Connecticut shorelines face:

Example:

• Home with $400,000 Coverage A and $2,500 standard deductible
• Hurricane deductible: $20,000 (5% of $400,000)
• Wind damage during declared hurricane: $20,000 deductible applies
• Fire damage any time: $2,500 standard deductible applies

Exam Tip: The hurricane deductible is 5% of Coverage A and applies to coastal properties within 2,600 feet of shorelines. It triggers when the NWS declares hurricane winds of 74+ mph ANYWHERE in Connecticut.

Windstorm Deductibles

Non-Hurricane Windstorm:

• Standard deductible typically applies
• Some policies may have separate wind/hail deductibles
• Percentage-based deductibles common (1%-5% of Coverage A)
• Lower than hurricane deductibles

Connecticut-Specific Policy Provisions

Replacement Cost Coverage

Connecticut requires replacement cost coverage for dwelling coverage (Coverage A) under most homeowners policies:

Replacement Cost vs. Actual Cash Value:

Replacement Cost Requirements:

• Must insure dwelling to at least 80% of replacement cost
• Failure to maintain 80% results in coinsurance penalty
• Personal property may be actual cash value or replacement cost (endorsement)

Coinsurance Penalty Example:

• Replacement cost: $400,000
• Required insurance (80%): $320,000
• Actual insurance carried: $240,000 (only 60%)
• Loss amount: $100,000
• Payment: $100,000 × ($240,000 / $320,000) = $75,000 (penalty for underinsurance)

Exam Tip: Connecticut homeowners must insure to at least 80% of replacement cost to avoid coinsurance penalties. Always ensure Coverage A meets this threshold.

Inflation Guard Endorsement

Automatic Increase in Insurance endorsement:

• Automatically increases dwelling coverage annually
• Typically 2%-4% per year
• Helps maintain adequate insurance to replacement cost
• Prevents gradual underinsurance from inflation

Ordinance or Law Coverage

Building Code Upgrade Coverage:

• Covers increased costs due to current building codes
• Important for older homes requiring updates during repairs
• Typically 10%-25% of Coverage A
• May be included or available by endorsement

Water Backup Coverage

Sewer and Drain Backup:

• Covers damage from water/sewage backup through drains
• Not covered under standard homeowners policies
• Available by endorsement
• Typical limits: $5,000-$25,000

Connecticut Flood Insurance

National Flood Insurance Program (NFIP)

Connecticut coastal properties require flood insurance:

NFIP Coverage Limits:

Flood Zones:

• High-Risk Areas (A, V zones): Mandatory flood insurance for mortgaged properties
• Moderate-Risk Areas (B, C, X zones): Optional but recommended
• V Zones (Velocity Zones): Coastal areas with wave action, highest risk

NFIP Requirements:

• Separate policy from homeowners insurance
• 30-day waiting period before coverage begins
• Federal program administered through private insurers
• Covers building and contents separately

Private Flood Insurance:

• Growing private market alternative to NFIP
• May offer higher limits than NFIP
• Potentially more flexible coverage options
• Must meet lender requirements if mortgaged

Exam Tip: NFIP flood insurance has a 30-day waiting period. Coverage begins 30 days after application and payment. Emergency declarations may shorten waiting period.