homeowners insurance coverage types

What comes to your mind when you hear of homeowners insurance? You probably envision it as the kind of protection only people living in their own homes take. The case, however, applies to any home you live in, whether it is a rental, condo, mobile, or you are renting it out to others.

You might be daunted by the array of homeowners insurance coverage types, but don’t worry. There are a limited number of policy types or “forms. We’ll explain.

Home Structure Coverage

This is one of the different types of homeowner insurance policies. It protects your home structures such as ceilings, floors, walls, and built-in facilities in your home. It is a basic cover in homeowners policies and covers damages arising from fire, vandalism, hurricane, theft, and hailstorms.

Depending on your insurance company, the coverage differs in the list of risks it covers. Most policies also cover other structures not attached to the house, such as a gazebo, shed, or garage.

In case of any risk wrecking the home, it can cover the cost of rebuilding your home depending on your policy limit. You may have to include additional policies since the dwelling coverage doesn’t cover everything.

Personal Liability

This is another of the important homeowners insurance coverage types. The policy covers property damage or bodily injuries that you, your family members, or pets cause to others. It also covers lawsuits, paying court awards, and the cost of defending you in court up to your policy limit.

You can also add to the coverage an excess liability policy, which includes claims for higher liability limits, slander, and libel. You need to browse around to find the best homeowners insurance price for this kind of coverage.

Personal Belongings Coverage

This one covers clothing, sports equipment, furniture, and any personal valuables you have in your home. It covers belongings if they are stolen, burned, or destroyed by any other insured risk.

For expensive items such as fur, silverware, and jewelry, if stolen there are dollar limits on them. You may opt to insure your valuables to their real value. To do so, buy a special floater or personal belonging endorsement, and the item appraised value will be protected.

Additional Living Expenses Coverage

If your home becomes inhabitable due to a risk occurrence included in the policy, you will get compensation. The policy covers the expenses of living away from your home. It covers expenses such as meals, hotel bills, and any other that you will incur during the rebuilding of your house.

Standalone Homes Coverage

HO-1– It covers a list of specific 11 perils: fire and lightning; explosion; vehicles; smoke; malicious mischief and vandalism; glass; explosion; theft volcanic eruptions; aircraft; riots and civil commotion; windstorms and hail; and vandalism.

It only covers the perils on the list and no other that is unnamed. It doesn’t include personal belongings.

HO-2– It covers all the 11 perils covered by HO-1 and some more. The additional dangers it includes are water damage from faulty plumbing, falling objects damage, household appliances, and heating air conditioning.

Its terms are the same as HO-1, as it only covers the perils that are on the list. It, however, insures personal property in your home.

HO-3– It’s a common policy as it offers a broad coverage. It covers all the included 16 perils apart from earthquakes, floods, nuclear accidents, sinkholes, and landslides.

It covers the same personal belongings in your home as in the HO-2 policy.

HO-5– It is more like HO-3 as it covers all the 16 perils and others not in the excluded list. It is, however, more comprehensive and insures against all perils apart from the ones excluded. Due to its broad coverage, it’s more expensive than the others.

HO-8– It is appropriate for older homes whose replacement cost exceeds the actual home value. It mostly covers architectural structures and registered landmarks.

It covers 11 risks and is affordable as its payout is smaller. The homes are usually 40 years older and above and do not qualify for the HO-3 policy form.

Renters Coverage

HO-4– Also referred to as renter’s insurance, it covers personal property in a rental apartment or home. The landlord usually takes the HO-1 policy that doesn’t include the tenants’ belongings. HO-4 becomes then the policy of choice for tenants to insure their personal belongings.

It also covers additional living expenses in case the rental home becomes inhabitable due to perils already covered. It does not include liability coverage, and one should consider adding it to the policy at an extra cost.

Co-Op and Condo Owners Coverage

HO-6– This is specifically for owners of condos and co-op associations. As an owner, read through the policy form to ensure it covers all the perils you want it to cover. Some policies may have a lower coverage that, in case of extensive damage, can’t insure your co-op or condo.

For a condo, HO-6 covers it like a single home—as its owned by the policyholder. As such it insures liability, belongings, and additional living expenses.

For co-op, it belongs to the tenants as the shareholders of the home. They, therefore, have to take the HO-6 policy instead of the renter’s insurance as they have ownership. Just as in the condo, co-op policy is also limited.

 Mobile Home Coverage

This policy covers manufactured homes and any other structure attached to them. It covers the same perils as HO-1 or HO-3 homeowners’ policy forms. The mobile home cover only insures the home when it’s stationary and not on transit.

There are different types of home insurance covers that are optional, and they include the following: –

  • Earthquake Insurance

The policy has its deductible and covers damage occurring in your home as a result of an earthquake.

  • Flood Insurance

It has its deductible and insures your home against damages arising from floods. If your home is in an area prone to floods, consider taking this policy.

  • Ordinance or Law Insurance

You will need this policy if you want to rebuild your house after a loss, and it has to meet the building codes of the time. It is the best policy if you have an old home.

Ready to Pick Your Best Plan?

Choosing any kind homeowners insurance coverage types is critical as you are never sure when disaster may strike. It gives you peace of mind knowing that in case anything goes wrong, you will not be rendered homeless.

From the information above, you now can choose a policy that befits you well. If you feel like you still need more information on this, you can visit our website or give us a call and all your questions will get answers.