When you are trying to secure your families financial future, figuring out the type of homeowners insurance policy you need is essential.
And here's the thing:
There are multiple types of home insurance policies. Understanding how each one works can help you get the best amount of coverage for the lowest rates.
In this post today I will go over all of the different types of homeowners insurance, how they work, what they cover, and which option works best for each type of home.
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Types Of Homeowners Insurance Plans
The different types of home insurance plans include:
Policy | Who Is It For | Sub-Policies | What's Covered? |
---|---|---|---|
HO-1-Basic Form | Homeowners | Hazard | Damage to the structure of your home caused by 10 named perils |
HO-2-Broad Form | Homeowners | Hazard + Personal Property | Damage to the structure of your home and personal property caused by 16 named perils |
HO-3-Special Form | Homeowners | Hazard + Personal Property + Liability + ALE | Damage to the structure of your home and personal property caused by open perils, lawsuits filed against you, and the costs of temporary relocation |
HO-4-Tenant's Form | Renters | Personal Property + Liability + ALE | Damage to the structure of your home and personal property caused by open perils, lawsuits filed against you, and the costs of temporary relocation |
HO-5-Comprehensive Form | Homeowners | Hazard + Personal Property + Liability + ALE | Damage to the structure of your home and personal property caused by open perils, protection against liability lawsuits, and the costs of of temporary relocation |
HO-6-Condo Form | Condo/Co-Op owners | Hazard + Personal Property + Liability + ALE | Damage to certain parts of your of your home and personal property caused by 16 named perils, lawsuits filed against you, and the costs of temporary relocation |
HO-7-Mobile Home Form | Mobile Home Owners | Hazard + Personal Property + Liability + ALE | Damage to the structure of your mobile home and personal property caused by 16 named perils, lawsuits filed against you, and the costs of temporary relocation |
HO-8-Older Home Form | Owners of old or historic/landmark homes | Hazard + Personal Property + Liability + ALE | Damage to the structure of your home and personal property caused by 16 named perils, lawsuits filed against you, and the costs of temporary relocation |
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HO1: Basic Form
Your basic form home insurance policy is super simple, it will only cover what is outlined in your policy.
These types of policies are known as "named peril" policies which simply mean that if the type of peril isn't named, it isn't covered.
Unfortunately this policy only covers 10 perils which are:
- Theft
- Lightning
- vandalism
- Explosions
- Fire or smoke
- Volcanic eruption
- Hail and windstorms
- Damage from aircraft
- Damage from vehicles
- Riots and civil commotion
While this may seem like a reasonable amount of things to cover, the policy is much more limited in the fact that it also doesn't cover personal property or personal liability coverage.
Luckily for us, most states and insurance companies don't offer this type of policy anymore.
Companies were finding that the monthly premiums for a more comprehensive policy was too close to the price of an HO1 basic form policy.
HO2: Broad Form
Think of the broad form policy as an upgrade to the basic form policy, it will cover all the perils in your HO-1 policy and:
- Falling objects
- Weight of ice, snow, or sleet
- Freezing of household systems like AC or heating
- Accidental discharge or overflow of water or stream
- Sudden and accidental damage from an artificially generated electrical current
- Sudden and accidental tearing apart, cracking, burning, or bulging of pipes and other household systems
Just like the HO-1 basic form policy, the HO-2 policy is a "named perils" policy, and any loss caused by an event not listed in the policy won't be covered.
The broad form policy will usually cover the structure and your personal property.
While a broad form policy gives you more coverage than a basic form policy it still limits you on things covered.
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