What are the Various Kinds of Homeowners Insurance?
When it comes to homeownership, home insurance is something that you absolutely need to know about. Understanding the many details about the types of homeowners insurance that is available is imperative when you are in the midst of shopping for the right policy. If you are unfamiliar with homeowners insurance you may find yourself overwhelmed by the plethora of information available.
While details can vary by state, it is important to at least have an idea of what you are getting into before starting your search. Here is an overview of the standard homeowners insurance options:
HO-1
HO-1 is a limited insurance policy. Unlike other options that we will cover further on this one only covers 10 perils of homeownership. Because of this, numerous mortgage companies do not believe that this option provides sufficient coverage.
HO-2
This is a popular option when it comes to home insurance policies. Unlike HO-1 it covers all 16 perils of homeownership. Many people like that this option comes with lower premium costs. However, at the same time, that means that it also comes with less coverage. This means that any damage that is caused by events other than those listed on your policy generally isn’t covered.
HO-3
The is considered by many in the insurance game as the most popular level of homeowners insurance. This option covers any and all disasters except those that are specifically excluded. Additionally, the HO-3 insures attached structures, so unlike with other options, your deck and garage are covered.
HO-4
HO-4 is a renters insurance policy that is designed to protect your belongings against all 16 perils. Now, this policy only covers your personal items. It does not cover the building itself because the landlord is responsible for insuring the dwelling. The majority of HO-4 policies also provide liability insurance. This is a great option in case someone is injured in your home. It also provides money for living expenses should you need to stay somewhere else for a time period while the rental property is being repaired or renovated.
HO-5
HO-5 is a much more comprehensive and detailed version of the HO-3 form. It is generally only available to those who own a new build. In order to qualify the house has to be very well maintained. It also has to be situated within close distance to fire protection services. Like an HO-3 form, an HO-5 policy will financially protect you against all 16 perils unless your policy specifically excludes them in writing. The difference between the two options is that HO-5 provides better protection for your personal belongings as well. This means that it insures your belongings against all causes of loss that are not specifically excluded. HO-3 however, only covers causes named on a specified list.
HO-6
HO-6 is the option for those in a condominium or co-op. It provides coverage of the personal property of condo owners against all 16 perils. It also typically includes liability insurance. In most cases, condo insurance will extend to the walls, floors and the ceilings of your dwelling. However, the building structure is insured by the condo association.
HO-7
Similar to an HO-3, the HO-7 home insurance policy is designed specifically to cover mobile or manufactured homes.
HO-8
HO-8 is an insurance policy that is designed for older homes. The coverage details are similar to an HO-3, however with a special adjustments to better suit older homes. This type of homeowners insurance policy is usually also used for historic homes and registered landmark dwellings.