Kinds Of Homeowners Insurance

Not sure what kind of homeowners policy you should buy? You aren’t the only one. There are different levels of coverage available, and different kinds of policies. Choosing the right one depends on what kind of home you own, and how much coverage you need.

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If you think it’s confusing now, be glad you weren’t trying to buy a policy back in the 1950s. Back then, you needed a separate policy to cover each individual “peril” your home could face — fire, theft, storm damage, and so on. Even after companies began selling “all-in-one” policies, things were still confusing. It wasn’t until the early 1970s that a set of standard homeowners policies was developed.

Which Kind Do You Need?

Homeowners insurance comes in 8 different styles. Choose the one that best fits your situation.

• HO-1 only covers property specifically mentioned in the policy. It’s often used to insure expensive works of art.
• HO-2 is like HO-1, but applies to specific portions of a home. It is usually a named peril policy. That means it protects against damage from a specific event, like a windstorm.
• HO-3 is the most common kind of policy. It covers your home and its contents. It also provides coverage against liability if someone gets hurt on your property.
• HO-4 is renters insurance. It covers the contents of your apartment, and can also provide liability coverage.
• HO-5 is like HO-3 — it covers your home and its contents. But it covers more perils than a HO-3 policy.
• HO-6 is for people who own condos. An HO-6 policy only covers the part of the building that you own, and the contents of your condo.
• HO-7 is for mobile home owners.
• HO-8 is for people with older homes. The replacement cost of an older home may be higher than its market value. An HO-8 policy lets you have premiums that reflect the lower market value.

Besides these basic kinds of coverage, you may need to get a rider on your policy. A rider gives you additional coverage for a specific peril or a specific piece of property. Many people get riders to insure an expensive jewelry collection, for example.

It’s also common to get an umbrella policy. An umbrella policy provides you with additional liability coverage.

It pays to consult with a professional insurance agent to figure out exactly what kind of coverage you need. To get connected with agents in your area, use our free online quote service.