Vermont Homeowners Insurance

Vermont Housing Characteristics

Vermont's housing stock presents unique insurance considerations:

Vermont Housing Demographics

Vermont Climate Impact

Vermont's harsh winters create unique property insurance risks:

Winter Perils:

• Heavy Snow Accumulation: 60-100+ inches annually in mountains, 40-80 inches in valleys
• Ice Dams: Extremely common due to freeze-thaw cycles
• Frozen Pipes: Routine temperatures below -10°F
• Roof Collapse: Snow load can exceed structural capacity
• Ice Storms: Nor'easters cause significant damage

Other Weather Risks:

• Flooding: Flash floods from heavy rain and spring snowmelt
• High Winds: Nor'easters and occasional severe storms
• Lightning: Summer thunderstorms
• Hail: Less frequent than Midwest but still occurs

Exam Tip: Vermont's extreme winter weather is a major exam focus. Know how ice dams, frozen pipes, and snow loads are covered under standard HO-3 policies.

Homeowners Policy Forms

Vermont uses standard ISO (Insurance Services Office) homeowners forms:

Common Vermont Homeowners Policies

HO-3 Special Form (Most Common)

The HO-3 is Vermont's most popular homeowners policy:

Coverage A - Dwelling:

• Open-peril (All-risk) coverage
• Covers all direct physical loss EXCEPT specifically excluded perils
• Includes structure, attached structures, built-in appliances
• Replacement cost basis (typically)

Coverage B - Other Structures:

• Open-peril coverage
• Typically 10% of Coverage A
• Detached garage, sheds, fences, driveways

Coverage C - Personal Property:

• Named-peril coverage (16 named perils)
• Typically 50-70% of Coverage A
• Actual cash value or replacement cost (with endorsement)
• Off-premises coverage included

Coverage D - Loss of Use:

• Typically 20-30% of Coverage A
• Covers Additional Living Expenses (ALE) if home uninhabitable
• Important for Vermont winter damage (heat failure, pipes burst)

Coverage E - Personal Liability:

• Typically $100,000 to $500,000
• Covers legal liability for bodily injury or property damage
• Medical payments to others (typically $1,000-$5,000 per person)

Coverage F - Medical Payments to Others:

• Typically $1,000-$5,000 per person
• No-fault coverage for guest injuries
• Separate from liability coverage

Named Perils (HO-2, HO-3 Personal Property)

The 16 named perils covered under HO-2 and for personal property under HO-3:

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 of Plumbing, Heating, AC, or Household Appliance
15. Sudden and Accidental Damage from Artificially Generated Electrical Current
16. Volcanic Eruption

Exam Tip: Named peril #11 "Weight of Ice, Snow, or Sleet" and #12 "Accidental Discharge or Overflow of Water" are particularly relevant in Vermont for roof collapse and frozen pipe claims.

Vermont Winter Weather Coverage

Ice Dam Damage

What Are Ice Dams?

• Snow melts on warm roof, refreezes at cold eaves
• Ice buildup prevents drainage
• Water backs up under shingles, leaks into home
• Extremely common in Vermont

HO-3 Coverage:

• ✓ Covered under open-peril dwelling coverage
• ✓ Interior damage (walls, ceilings, flooring) typically covered
• ✓ Roof damage covered
• ✗ Not covered: Preventive measures (heat tape, removal)

Prevention Measures:

• Adequate attic insulation and ventilation
• Roof raking after heavy snowfalls
• Heat cables/tape (not covered but recommended)

Frozen Pipe Damage

Common in Vermont:

• Temperatures routinely reach -10°F to -20°F
• Pipes in unheated areas vulnerable
• Vacation homes at high risk during vacancy

HO-3 Coverage:

• ✓ Covered under named peril #12 (Accidental Discharge or Overflow)
• ✓ Water damage to home and contents typically covered
• ✓ Pipe repair usually covered
• ✗ Not covered if home vacant >60 days without proper winterization

Policy Condition:

• Insured must maintain heat OR drain water systems if vacant
• Failure to maintain heat during vacancy may void coverage
• Vacation homes need special attention

Snow Load and Roof Collapse

Vermont Snow Loads:

• Mountain areas: 100+ inches per year
• Valley areas: 40-80 inches per year
• Roof design must account for 50-100 lbs/sq ft snow load

HO-3 Coverage:

• ✓ Covered under named peril #11 (Weight of Ice, Snow, or Sleet)
• ✓ Structural damage covered
• ✓ Damage to contents covered
• ✗ Not covered: Normal settling or cracking

Risk Factors:

• Flat or low-slope roofs
• Valley areas where snow accumulates
• Older homes with inadequate structural support
• Ice dams adding weight

Wood Heating Systems

Prevalence in Vermont:

• Many Vermont homes heat with wood (primary or supplemental)
• Wood stoves and pellet stoves common
• Fireplaces frequent

Insurance Considerations:

• Insurers may require professional installation inspection
• Proper clearances from combustibles required
• Chimney inspection may be required
• Some insurers charge surcharge for wood heat
• Some insurers exclude or limit coverage

Coverage Issues:

• Fire caused by wood stove: typically covered
• Improper installation: may be excluded
• Lack of maintenance: may limit coverage

Exclusions and Limitations

Vermont homeowners policies have standard exclusions:

Major Exclusions

Water Damage Exclusions

Excluded:

• Flood (rising water from outside)
• Surface water, waves, tidal water
• Sewer backup (without endorsement)
• Sump pump overflow (without endorsement)

Covered:

• Sudden and accidental water discharge (burst pipes)
• Rain entering through roof opening caused by covered peril
• Ice dam damage (typically)

Exam Tip: "Water damage" doesn't mean ALL water is covered. Flood (water from outside rising) is ALWAYS excluded. Sudden and accidental discharge (burst pipe from inside) IS covered.

Vermont-Specific Considerations

Vacancy Clause:

• If home vacant >60 consecutive days, some coverages suspended
• Particularly important for vacation homes
• Vandalism, theft, and glass breakage often excluded during vacancy
• Must notify insurer of extended vacancy

Seasonal Homes:

• Higher premiums due to extended vacancy
• May require winterization
• Some insurers specialize in seasonal property
• May require regular inspections during off-season

Special Coverages and Endorsements

Vermont homeowners may need additional endorsements:

Common Endorsements

Scheduled Personal Property

For high-value items, schedule them separately:

Benefits of Scheduling:

• Higher coverage limits
• Broader coverage (often open-peril)
• No deductible
• Agreed value (no depreciation)

Commonly Scheduled Items:

• Jewelry and watches
• Furs
• Fine arts and antiques
• Collectibles (stamps, coins)
• Musical instruments
• Cameras and equipment
• Silverware

Requirements:

• Appraisal usually required
• Photos helpful
• Additional premium charged

Underwriting Considerations

Vermont insurers consider these factors:

Underwriting Factors

ISO Fire Protection Class

Vermont's rural nature affects fire protection:

Impact: Class 10 homes may pay 2-3x more than Class 3 homes for same coverage.

Hard-to-Insure Properties

Some Vermont properties face challenges:

Issues:

• Homes >100 years old
• Knob-and-tube wiring
• Roofs >25 years old
• Oil tanks (especially underground)
• Wood heat as primary source
• Previous claims (especially water or fire)
• Homes over $1 million value

Solutions:

• Specialty insurers (Vermont Mutual, Co-operative Insurance Companies)
• Vermont FAIR Plan (last resort)
• Update systems (wiring, roof, heat)
• Higher deductibles

Claims Handling

Vermont homeowners claims follow standard processes:

Filing a Claim

1. Notify Insurer Promptly: Call agent or insurer immediately
2. Document Damage: Photos, videos, written descriptions
3. Prevent Further Damage: Mitigate losses (tarp roof, turn off water)
4. Keep Records: Receipts for temporary repairs and additional expenses
5. Cooperate with Adjuster: Provide access and information

Vermont Winter Claims

Typical Winter Claims:

• Ice dam water damage
• Frozen pipe bursts
• Roof collapse from snow
• Heating system failures causing freeze damage
• Driveway/walkway injury liability claims

Peak Claim Season: January through March

Loss of Use / Additional Living Expenses

If home is uninhabitable (common after pipe burst or fire):

Covered Expenses:

• Hotel/rental housing costs
• Increased food costs (restaurant meals)
• Storage of belongings
• Pet boarding
• Increased transportation costs

Time Limit: Usually shortest of:

• Time to repair home
• Time to permanently relocate
• Policy limit reached

Vermont Reality: Winter claims often require extended ALE—heat restoration and frozen pipe repairs take time in cold weather.

Vermont FAIR Plan

The Vermont FAIR Plan (Fair Access to Insurance Requirements) is the state's insurer of last resort:

When Needed

Vermont FAIR Plan provides coverage when:

• Property declined by standard market
• High-risk property characteristics
• Previous claims history
• Location issues

Coverage

• Basic fire coverage typically offered
• Limited perils compared to HO-3
• Higher premiums than standard market
• Deductibles apply

Limitations

• Not first choice—higher cost, less coverage
• Should seek private market first
• May require property improvements
• Subject to annual review

Exam Tip: Vermont FAIR Plan is the "insurer of last resort" providing basic property coverage when standard market declines. Premiums are higher and coverage more limited than standard HO policies.

Summary

Vermont homeowners insurance must address:

• Severe winter weather (ice dams, frozen pipes, snow loads)
• Rural locations with volunteer fire departments
• Older housing stock
• Wood heating systems
• Vacation/seasonal homes

Most common policy: HO-3 Special Form with open-peril dwelling coverage

Critical coverages for Vermont:

• Weight of ice, snow, or sleet (named peril #11)
• Accidental water discharge (named peril #12—frozen pipes)
• Adequate dwelling limits for winter damage
• Loss of use for extended repair periods

Next section covers commercial property insurance in Vermont.