What are the different types of homeowners insurance? You might ask this question if you are getting ready to buy a home or thinking that you may need additional coverage. There are a number of different policies that are written in the United States. Below you will see a little information about each type.
The forms for homeowner’s insurance policies are standardized to insure consistency and ease of use. These forms are provided by the Insurance Services Office or the ISO. The various types of policies that are available are referred to in letter/number combinations, with HO being the letters and the numbers running from 1 thru 8.
HO-3 is the most common policy type and is sometimes referred to as “all risk” or “open perils”. It and other policies of this nature cover damage to the property, the dwelling, the occupants and their possessions in case of certain events.
The events that are covered and the amount of coverage must be outlined in the policy. HO-5 is a similar policy, but covers a wider breadth of incidents.
Some of the events that are generally covered in basic home insurance policies include damage due to lightning or theft. Some of the events that are typically not covered include floods and earthquakes. Special insurance must be purchased if you live in a flood or earthquake prone area.
Fire insurance is added to most policies, but the home must be equipped with smoke detectors and fire extinguishers to qualify.
Common possessions are covered by standard policies, but in some cases an individual may need a special rider (an HO-1) to cover a particularly valuable item. A valuable painting, for example, might need a separate rider.
Specific “portions” of a home might require additional coverage. For example, an indoor swimming pool might only be covered by an HO-2 rider.
Renters insurance (HO-4) is a type of coverage that is purchased to cover items within a home or apartment rather than the building itself. Usually, the owner of the property has insurance that covers the structure, but the policy cannot be extended to cover items owned by the renter.
An HO-6 policy was created specifically for condominium owners. Certain parts of the structures are covered by the Association’s insurance. An HO-6 fills in the gaps. The last policy type, HO-8, was created for people that own older or heritage homes.
It is important to consider all of your options when you are purchasing homeowners insurance and to be familiar with what your policy covers. Most companies now provide quotes on line, so that you can easily compare your options.
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