Types of Home Insurance
The best homeowner’s insurance will cover all perils except for those that are specifically excluded in the policy language. Here are the types of policies offered:
- Basic Homeowners Policy, HO-1: This is a basic policy that protects the homeowner against 10 basic perils such as fire or smoke, explosions, lightning, volcanic eruptions and damage from aircraft.
- Broad Form Policy, HO-2: The Broad Form policy covers all the 10 perils in the basic policy, plus a few more, like accidents from electric currents. Your structure, your personal belongings and your personal liability are covered.
- Special Form Policy, HO-3: This policy covers everything in the Broad Form policy, plus more. This policy covers you if you damage someone’s property or injure them.
- Tenant’s Form, HO-4: Tenant’s form is for renters and is commonly known as renter’s insurance. It covers your personal belongings and personal liability.
- Comprehensive Form, HO-5: This policy is comprehensive because it covers more perils than other policies. This policy is similar to the Special Form policy in that it can financially protect you from all perils except for ones specifically stated as not covered in your policy.
- Condominium Unit Owners Form, HO-6: This is for owners and/or occupants of condominium units. It insures your personal property and your walls, floors and ceiling against all of the perils and also extends coverage for damage to additions and/or alterations that the unit owner may have made, up to specified limits. Usually, this coverage for alterations kicks in only after any insurance limits are reached by policies (if any) that are purchased by the condominium association.
- Mobile Home Form, HO-7: This is similar to the Special Form policy, but it is specifically for mobile homes. Mobile homes don’t have the same coverage as regular homeowners’ insurance.
- Older Home Form, HO-8: This is for older homes where the cost to rebuild is greater than the market value. It covers the same set of perils as the Basic Homeowners policy.
- Dwelling Fire Form: This policy only covers your dwelling and only for a few specific perils. It does not cover your personal property, personal liability or medical payments. This coverage is a popular option for vacation homes. It’s also the kind of limited policy your mortgage lender will purchase for you if you let your homeowner’s policy lapse.