Homeowners insurance comes with many options as there are lots of items to potentially protect and seemingly endless perils with which to financially guard your home from. Of course, this begs the question—what are the different types of coverage for homeowners insurance? In addition, what type or types of coverage are appropriate for you?
Types of Coverage for Homeowners Insurance: Standard Coverage
This is the most common type of coverage and is a combination of what is known as HO-1 and HO-2. It is for homeowners and covers your home against the standard perils that are not specifically excluded from the policy. The perils covered usually include damage due to fire, theft, vandalism, riot, accidental plumbing issues, snow, ice, bursting of hot water systems not due to negligence and falling objects. The dwelling, the contents of the home and other structures on the property will generally be covered against these perils. You will want to review any prospective policy to ensure the exact list of covered perils and those that are not covered. In most instances, the perils not covered will be damage due to severe wind/hail, flood, mudslides and earthquakes.
Types of Coverage for Homeowners Insurance: Extended Coverage
Depending upon the geography of where you live, you may need to purchase additional coverage, also known as HO-3 coverage. This can vary from region to region; for example, if you live on the coast, you may have to purchase an additional wind/hail policy to protect against damage due to hurricanes. If you live in a flood plain or flood prone area, your lender will require that you purchase flood insurance. In most cases, for both of these types of coverage, you will purchase this coverage through your insurance company but it will be underwritten by your state. Other extended coverage items include protection from wild fire damage, mud slides and earthquakes. Homes in regions where these issues are common may require a separate policy with a separate premium.
Types of Coverage for Homeowners Insurance: Renters Insurance
As a renter, you will still want to consider insurance. HO-4 is a type of homeowners insurance that covers renters. It generally covers the same perils as an HO-1 and HO-2 policy, but the insurance is for your personal belongings. In addition, it will also provide liability protection in case you cause harm to the tenants around you or damage. It will also normally provide living expenses for you if forced out of your home. Renters insurance is generally rather inexpensive compared to the other types of homeowners insurance coverage.
Types of Coverage for Homeowners Insurance: Coverage for Older Homes
If you have an older home, you may have difficulty getting replacement coverage for home damages through a standard policy. A special policy for older homes will provide a modified form of replacement coverage. The importance of having this type of coverage, is that if damages occur, your homeowners insurance will pay for building materials that are commonly used today rather than those used to build your older home.
Compare Rates to Choose from the Types of Coverage for Homeowners Insurance
While circumstances will generally dictate the type of coverage you need to purchase, comparing rates can help make decisions regarding which company to choose from and the level of coverage (deductibles, liability coverage and other monetary limits). Whether you are looking for new coverage for your home or are simply looking to compare your current coverage with what is available, rate comparisons are essential to getting quality insurance at the best price. So, take a few minutes to gather 3 to 5 homeowners insurance rate quotes from an established, trusted online site and you could save yourself hundreds of dollars per year in premiums.