Types of Homeowner's Insurance

Like anything else, homeowner’s insurance needs to be customized to fit your lifestyle. There are many different types to choose from to best suit your living situation. There are 8 types of homeowner’s insurance policies. HO-1 to HO-8. First, it should be noted that there is open peril and named peril policies. This means that hazards covered by your policy are specifically listed (named peril) or not (open peril). In the named peril policy, anything that isn’t specifically listed will not be covered. In an open peril policy, anything that is not listed as an exclusion is covered. Here is a more detailed list of the HO-1 to HO-8 policy types.

1. HO-1: Basic bare-bones policy. It typically covers 10 of the 16 major perils and doesn’t include personal property or living expenses. Covers the cash value of the home. Meaning that it covers the home value minus depreciation. Will not cover the cost to rebuild.

2. HO-2: Covers more perils than HO-1. Covers the home and structures on the property. Covers personal property and living expenses. Belongings only covered for cash value.

3. HO-3: Most common policy type. Covers home and belongings, personal property, medical payments to others, and additional living expenses. There are some exclusions.

4. HO-4: Known as renters insurance. Belongings and additional living expenses are covered.

5. HO-5: Comprehensive coverage. Highest type of coverage. Pays for replacement costs of home rather than cash value. Covers personal property, liability, medical payments to others, and additional living costs.

6. HO-6: Condo insurance. Usually covers walls, floors, and ceilings. Covers renovations after purchasing. Personal belongings, liability, medical payments to others, and additional living costs.

7. HO-7: Mobile home coverage. Similar to HO-3. Only covers home while it’s stationary.

8. HO-8: Homes over 40 years old. These are typically more costly to replace. Covered for the 10 most common perils. Liability, medical payments to others, and additional living costs are also included.

Follow these tips to find out which policy will be best for your situation.

1. Get an accurate rebuild cost assessment

2. Include home improvements

3. Know the value of your belongings

4. Consider add ons

5. Have an agent shop around rates with different companies

6. Ask for discounts

Personalizing your homeowner’s insurance can make a big difference if and when disaster strikes. Make sure you have the best policy for your lifestyle. Contact us to shop around rates if you’re unsure if you’re getting the best options for you and your family.