Types of home insurance policies:
Amy Danise of Insure.com breaks down Homeowners policies:
You may hear the term “standard home insurance policy.” Home insurance policies are often similar because there are two organizations that supply policy forms to insurers: ISO and the American Association of Insurance Services. Some home insurance companies choose to use their own policies. Whichever type your insurer is using, the policy has to be approved by your state insurance department.
Your premiums will vary, and as with other forms of insurance, you can expect to find a wide range of rates among insurance companies for the exact same level of coverage. That’s why it’s important to shop around.
HO-1: Basic homeowners policy
- Covers your house and possessions against 10 different perils.
- HO-1 policies have been discontinued in most states.
HO-2: Broad homeowners policy
- Covers house and contents against 16 perils, which are named in the policy.
HO-3: Special form homeowners policy
- Covers the structure for all perils except those specifically excluded by the policy.
- Contents are covered against perils named in the policy.
HO-4: Renters insurance policy
- Covers contents for 16 named perils and includes liability coverage.
- It does not insure the dwelling itself.
- Also includes liability coverage for the renter.
HO-5: Premier homeowners policy
- Generally offered to newer, high-end homes that are well-maintained.
- Much like the HO-3 policy but contents are covered against all perils except those specifically excluded.
- According to the Insurance Information Institute, in some cases, depending the year of construction, the area where you live, your claims history, and other rating factors, you can buy an HO-5 for about the same cost as a traditional HO-3.
HO-6: Insurance for owners of co-ops or condominiums
- Provides personal property coverage, liability coverage and specific coverage of improvements to the owner’s unit. Insurance provided by the owner’s association normally covers most of the actual structure.
HO-8: Policy for older homes
- Covers the same perils as HO-2 but pays only for repair costs or actual cash value, since replacement cost could make the policy costly.
- Well-suited for older homes whose market value is considerably less than the cost to rebuild them.
Home insurance protects what is typically the biggest investment you’ll make: Your house. Yet this investment can disappear in matter of minutes or seconds if there’s a fire or natural disaster. Insurance is meant to come to the rescue in these times of calamity.
A home insurance policy covers much more than damage to your house. There are additional coverage types within a policy that can save you from financial disaster, with limits often set as a percentage of the dwelling’s coverage amount. (Check your own policy for limits.)
For a FREE policy review and insurance claim consultation call: Cavalry Public Adjusters, LLC. 305-898-7562. cavalrypublicadjusters.com