Benefits of the High Value Homeowners Policy

This post is going to be specific to the North Carolina Enhanced Homeowners policy, so if you are not in North Carolina I would speak with an agent licensed in your state to see if there is a similar policy available to you.

What is an Enhanced Homeowners Policy?

The enhanced homeowners policy (HE7/high value homeowners policy) is specifically designed for higher valued homes. A home is eligible if its replacement cost is estimated at $250,000+ based on an insurance to value report at the time the policy is issued. At Long Insurance, when we write the HE7 policy, we always add the extended (21) endorsement to the policy to round out the coverage and ensure our clients are fully covered. I’ll go into more detail about the coverages included in the HE7-21 policy below.

The HE7-21 policy is not available with every homeowners insurance company in North Carolina. It’s mainly offered by companies who work with independent agencies, like ours. However, just because an agent has access to quote you the HE7-21 homeowners policy, doesn’t mean that’s what they’re giving you. This is why it’s always a good idea to specifically request an HE7-21 quote, if your home qualifies.

How is the Standard Homeowners Policy Different than the Enhanced Homeowners Policy?

There are several differences between the standard homeowners policy and the enhanced homeowners policy. I’ll list a few of the key differences below

• The standard homeowners policy is a combination of an open peril and named peril policy. Your dwelling and other structures are covered on an open peril basis while your personal property is covered on a named peril policy. The enhanced auto policy is solely an open peril policy.

Open Perils — refers to property insurance that insures against loss to covered property from all causes except those that are specifically excluded.
This method of identifying covered causes of loss in a property policy has traditionally been referred to as “all risks” coverage.

Named Perils — a property insurance term referring to policies that provide coverage only for loss caused by the perils specifically listed as covered.
It contrasts with all risks coverage, which applies to loss from all causes not specifically listed as excluded.

• On the standard homeowners policy, replacement cost on the dwelling is limited, usually to 125%. With the enhanced policy, replacement cost on the dwelling is guaranteed.
• The other structures coverage on the standard homeowners policy is limited to 10% while the other structures coverage on the enhanced policy is 20%.
• Primary mortgage expense is included in the loss of use coverage on the enhanced homeowners policy.
  • PME will pay the first mortgage payment for up to 12 months while the home is uninhabited due to a covered loss
• Water/Sewer backup coverage can be added onto the standard homeowners policy, usually with a maximum of $25,000. It is automatically included on the enhanced homeowners policy with a limit of $50,000
• The deductible on the enhanced homeowners policy is waived on losses over $50,000
• Personal injury coverage and replacement cost coverage are both optional coverages that can be added to the standard homeowners policy, but are automatically included on the enhanced homeowners policy.