Key Takeaways
- Kentucky homeowners policies follow ISO HO forms with state-specific endorsements
- Windstorm, hail, and tornado coverage is essential for Kentucky homes
- Flood insurance through NFIP is critical for Ohio River Valley properties
- Replacement cost coverage is standard for dwelling coverage in HO-3 policies
- The Kentucky FAIR Plan provides coverage when standard market insurance is unavailable
Kentucky Homeowners Insurance
Kentucky homeowners face diverse weather risks including tornadoes, severe thunderstorms, ice storms, and flooding in the Ohio River Valley region. Understanding homeowners insurance options is essential for protecting Kentucky properties.
Standard Policy Forms
HO-3 Special Form (Most Common)
The HO-3 is the standard homeowners policy form used in Kentucky, providing comprehensive protection for dwellings and personal property.
| Coverage | Type | Typical Limit |
|---|---|---|
| A - Dwelling | Special (open perils) | Replacement cost |
| B - Other Structures | Special (open perils) | 10% of Coverage A |
| C - Personal Property | Named perils | 50-75% of Coverage A |
| D - Loss of Use | Additional Living Expense | 20-30% of Coverage A |
| E - Personal Liability | Occurrence | $100,000 - $500,000 |
| F - Medical Payments | No-fault | $1,000 - $5,000 |
Other Available Forms in Kentucky
| Form | Coverage Type | Best For |
|---|---|---|
| HO-1 Basic | Named perils only | Budget protection |
| HO-2 Broad | Broader named perils | Moderate protection |
| HO-4 Renters | Contents and liability | Tenants |
| HO-5 Comprehensive | Open perils for all | Premium protection |
| HO-6 Condo | Unit owner coverage | Condominium owners |
| HO-8 Modified | Actual cash value | Older and historic homes |
Coverage Analysis
Coverage A - Dwelling
Dwelling coverage protects the structure of the home:
- Main house structure
- Attached structures (garage, deck)
- Built-in appliances
- Permanently installed fixtures
- Materials for construction or repair
Valuation Methods:
| Method | Description | Use Case |
|---|---|---|
| Replacement Cost | Full cost to rebuild without depreciation | Standard for most homes |
| Actual Cash Value | Replacement cost minus depreciation | Older homes, budget policies |
| Extended Replacement | 25-50% above limit | Protection against cost surges |
| Guaranteed Replacement | Full rebuild regardless of limit | Maximum protection |
Coverage B - Other Structures
Covers detached structures on the property:
- Detached garage
- Storage shed
- Fence
- In-ground swimming pool
- Gazebo or pergola
Standard limit is 10% of Coverage A, but can be increased.
Coverage C - Personal Property
Covers belongings throughout the home:
- Furniture and appliances
- Clothing and personal items
- Electronics and computers
- Sporting goods
- Books and collections
Special Limits on High-Value Items:
| Category | Typical Limit |
|---|---|
| Cash and coins | $200 |
| Securities and documents | $1,500 |
| Jewelry and watches | $1,500 |
| Firearms | $2,500 |
| Silverware | $2,500 |
| Business property | $2,500 |
Scheduled personal property endorsements can increase these limits.
Coverage D - Loss of Use
Pays additional living expenses when home is uninhabitable:
- Hotel or rental housing
- Restaurant meals above normal food costs
- Storage costs
- Pet boarding
- Laundry services
Coverage continues until home is repaired or policy limit is reached.
Coverage E - Personal Liability
Protects against lawsuits for bodily injury or property damage:
- Guest injuries on property
- Damage caused to neighbors' property
- Dog bite claims
- Accidents away from home (not auto)
Minimum recommended limit is $300,000-$500,000.
Coverage F - Medical Payments
No-fault coverage for guest injuries:
- Covers medical bills regardless of liability
- Designed to prevent lawsuits for minor injuries
- Typical limits $1,000 to $5,000
- Does not apply to household members
Exam Tip: Remember that Coverage A and B in an HO-3 are open perils (all-risk) coverage, while Coverage C is named perils only. This is a common exam question.
What type of coverage does Coverage A (Dwelling) provide under a Kentucky HO-3 policy?
A Kentucky homeowner's jewelry collection is stolen. What is the typical special limit for jewelry theft under a standard HO-3 policy?
Which coverage pays for a Kentucky family's hotel costs while their home is being repaired after a covered fire loss?