What if one day you came home, to no home.
Or a home that was in ruins because a tree fell right through the roof.
Unfortunately, accidents like these happen all the time. And that’s why most people choose to invest in homeowners’ insurance.
There are various types of homeowners insurance that you could avail. Each of these would offer different kinds of coverage, and it’s important to choose one that falls within your budget as well as your needs.
The whole purpose of insurance is to have some sort of protection in case something goes wrong — so let’s have a look at the options you have before you.
1. HO-1 Insurance
This is one of the most basic levels of insurance for any home.
This will provide coverage for the structure of your home against eleven issues including damage caused by fires, lightning, storms, riots, volcanoes, hail, explosions, vandalism, theft, and more.
This will not cover any danger or event that is not mentioned within the policy and is quite inflexible.
If you have additional needs, it is better to go with a more customizable option. For example, if you want to include protection for service line coverage, you may have to get that separately.
2. HO-2 Insurance
Like the HO-1 insurance, this covers all those eleven threats with an addition of water damage, falling objects, plumbing accidents, and damage caused due to household appliances.
It is also quite rigid in its structure and does not allow for any claims beyond the specified perils mentioned within its purview.
3. HO-3 Insurance
This is perhaps the most popular choice of insurance for homeowners.
It covers all 16 perils available under HO-2 insurance with provision for more inclusions. However, it does specifically exclude disasters like earthquakes, flooding, and nuclear accidents from its list.
To a certain degree, it would also cover valuable contents in your home that do not have their own insurance.
There may be some additional benefits with regard to the property itself, but for the most part, it’s fairly standard.
4. HO-5 Insurance
This type of insurance is very similar to HO-3 insurance.
However, where HO-3 provides only basic coverage for personal belongings in the home, the HO-5 goes a step beyond to cover almost all, unless specifically excluded.
Given the extent of its coverage, it’s also more expensive than the others.
5. HO-8 Insurance
This insurance is specifically designed for older homes that have a higher replacement cost than their actual cash value.
Similarly to the HO-1 insurance, this only includes coverage against 11 threats or perils.
It is a popular choice for homes older than 40 years. These homes generally do not qualify for other insurances, and so find themselves protection under the HO-8.
What Types of Homeowners Insurance Should You Invest In?
Study the geographical and social factors of your area before you decide.
Are you prone to disasters like tornados or floods? Are theft and vandalism common occurrences?
Make a list of your needs and compare them to the various types of homeowners insurance. Then choose something that covers all or at least most of your fears.
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