Types of homeowners insurance
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Types of Homeowners Insurance
There are eight types of homeowners insurance in the US, each one made for a specific purpose.
In this article, we’ll briefly discuss the different types to give you an idea of which one best suits your needs.
HO-1 Insurance: Basic Form
- An HO-1 type of home insurance only covers you against 10 perils. Most insurance companies no longer offer it because the coverage is too narrow for modern needs.
HO-2 Insurance: Broad Form
- A step up from the HO-1, this type of insurance is more common among homeowners. HO-2 insurance protects you from 16 different perils, including the weight of ice, sleet, or snow, freezing, and power surges. Also, HO-2 is an actual cash value type of insurance. This means that you’ll get reimbursed for the current market price of your asset, not what you paid for it.
HO-3 Insurance: Special Form
- This is what the vast majority of modern homeowners have for their home insurance policy. It has a replacement cost type of coverage for the structure of your home but only an actual cash value type of coverage for any personal property. This special form policy covers against “all-risks,” which means it goes beyond the 16 named perils of the HO-2. Instead, it has a list of exclusions, including earth movement, water damage from natural disasters, and neglect.
HO-4 Insurance: Contents Broad Form
- Also known as renter’s insurance, this type is made for those who are only renting their home from a landlord. With replacement cost coverage, this can cover personal liability, damages, and even additional living expenses in case the rented home becomes uninhabitable.
HO-5 Insurance: Comprehensive Form
- The second most popular type of insurance around, the HO-5, is somewhat like the HO-3, although it’s mostly for more expensive properties in riskier areas
HO-3 vs. HO-5
- While HO-3 and HO-5 insurance are similar, they do have distinct differences. For one, HO-3 automatically has a replacement value coverage for the structure of your home, but the default option for personal property is only actual value coverage. HO-5, however, has replacement value coverage for both by default. Also, while HO-3 covers all risks for home damage, it only covers named perils for personal property. HO-5 has an all-risk coverage for both, and it has distinctly higher limits than HO-3. In short, if you want something more comprehensive that will cover even your personal property, HO-5 is the preferable option.
HO-6 Insurance: Unit-Owners Form
- Also called condo insurance, this type of insurance is for those living in condominium housing, as well as co-op units and other connected house types like townhouses and rowhouses. It can include liability, damage to both the unit and your personal property, and additional expenses in case you need to move to temporary housing. It doesn’t cover common areas inside your condo, though, since those are covered by the homeowner association’s (HOA) insurance policy.
HO-3 vs. HO-6
- The main difference between HO-3 and HO-6 is who they cover. HO-3 applies to regular single-house owners, while HO-6 is for those living in co-op units, condominiums, or attached homes like townhouses.
HO-7 Insurance: Mobile Home Form
- As the name suggests, this type of insurance covers the potential needs of a mobile home that aren’t typically included in normal homes. This covers anything from trailers to modular homes.
HO-8 Insurance: Modified Coverage Form
- For those who have needs that aren’t covered by an HO-3, an HO-8 might be for you. This type of coverage is for houses that do not meet the basic criteria for HO-3, such as antique houses at risk of outdated building methods. Think you could use one of these? Contact us now at Magnum Insurance and get the right homeowners insurance for you today!
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