What Are the Different Types of Homeowners Insurance? - What You Need to Know
Homeowners insurance is something that every homeowner should have.
For most of us, our homes are the single largest investment we will ever make.
It is vitally important that we protect that investment.
Many lenders actually require homebuyers to obtain homeowners insurance before making a loan.
In fact it would be quite difficult to find a lender that did not have this requirement.
There are several different types of homeowners insurance available that each cover different things.
This article will define the different types of homeowners insurance and will also discuss some things that will affect the price of a policy.
In 1971 an organization known as the ISO was formed, the Insurance Services Office.
The ISO has established seven standardized homeowners insurance forms.
Each one covers a different set of potential perils.
HO-1 This is the most basic policy.
It covers your dwelling and personal property against fire or lightning, wind storm or hail, explosions, riots or civil commotion, aircraft, vehicles, smoke, vandalism or malicious mischief, theft, and broken glass.
HO-2 This policy covers everything covered in HO-1 and in addition to that also protects against falling objects, damage caused by the weight of ice, snow, and sleet, building collapse, damage of a water heating system, leakage or overflow of water from within a plumbing, heating, or air conditioning system, freezing of plumbing, heating, and air-conditioning systems, and accidental injury from electrical currents.
HO-3 This is the most common policy for a homeowner.
This policy covers everything that the HO-2 policy covers as well as any liability from visitors he may be injured on the premises.
HO-4 This policy is commonly referred to as renters insurance.
In this type of policy the dwelling is not covered because the owner of the policy is not the owner of the dwelling.
But, their personal property would be protected against the same perils and liabilities in an HO-3 policy.
HO-5 This policy is similar to HO-3 but is more comprehensive and covers a broader range of perils.
HO-6 This policy is designed specifically for condominium owners and provides coverage for the part of the building owned by the policyholder as well as their personal property.
HO-8 This type of policy is for older homes and the coverage is very similar to an HO-1 policy.
In addition to all the things that the above policies may or may not cover there are certain perils that generally are not covered unless specifically added to a policy.
Things such as floods and earthquakes are not standard perils covered by the above policies and would need to be added if you require coverage for those particular perils.
It's a good idea to do your homework and learn about your different options before you commit to a homeowner's insurance policy.
Of course you'll want to make sure you get the most coverage for the least amount of money and that will require shopping around for the best deal.
For most of us, our homes are the single largest investment we will ever make.
It is vitally important that we protect that investment.
Many lenders actually require homebuyers to obtain homeowners insurance before making a loan.
In fact it would be quite difficult to find a lender that did not have this requirement.
There are several different types of homeowners insurance available that each cover different things.
This article will define the different types of homeowners insurance and will also discuss some things that will affect the price of a policy.
In 1971 an organization known as the ISO was formed, the Insurance Services Office.
The ISO has established seven standardized homeowners insurance forms.
Each one covers a different set of potential perils.
HO-1 This is the most basic policy.
It covers your dwelling and personal property against fire or lightning, wind storm or hail, explosions, riots or civil commotion, aircraft, vehicles, smoke, vandalism or malicious mischief, theft, and broken glass.
HO-2 This policy covers everything covered in HO-1 and in addition to that also protects against falling objects, damage caused by the weight of ice, snow, and sleet, building collapse, damage of a water heating system, leakage or overflow of water from within a plumbing, heating, or air conditioning system, freezing of plumbing, heating, and air-conditioning systems, and accidental injury from electrical currents.
HO-3 This is the most common policy for a homeowner.
This policy covers everything that the HO-2 policy covers as well as any liability from visitors he may be injured on the premises.
HO-4 This policy is commonly referred to as renters insurance.
In this type of policy the dwelling is not covered because the owner of the policy is not the owner of the dwelling.
But, their personal property would be protected against the same perils and liabilities in an HO-3 policy.
HO-5 This policy is similar to HO-3 but is more comprehensive and covers a broader range of perils.
HO-6 This policy is designed specifically for condominium owners and provides coverage for the part of the building owned by the policyholder as well as their personal property.
HO-8 This type of policy is for older homes and the coverage is very similar to an HO-1 policy.
In addition to all the things that the above policies may or may not cover there are certain perils that generally are not covered unless specifically added to a policy.
Things such as floods and earthquakes are not standard perils covered by the above policies and would need to be added if you require coverage for those particular perils.
It's a good idea to do your homework and learn about your different options before you commit to a homeowner's insurance policy.
Of course you'll want to make sure you get the most coverage for the least amount of money and that will require shopping around for the best deal.
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