Exploring the Different Types of Home Insurance Plans
Home insurance companies don’t offer a “one size fits all” policy. Depending on your circumstance and your individual needs, you may have to investigate home insurance information before you find the policy that perfectly suits you. To help guide you, we’ve compiled the following home insurance guide that’ll describe each of the most commonly offered insurance plans.
HO-1 (Basic Homeowner Insurance)
Now seldom offered because of the increased availability and affordability of much wider-reaching plans, HO-1 is the most basic, bare-bones home insurance policy. With HO-1, your home and all its contents are covered against 11 “perils”, as compared with more comprehensive plans that protect you against 17. The 11 perils covered by HO-1 are fire, lightning, hail or windstorms, explosions, riots, aircraft, vehicles, smoke, vandalism, theft, and volcanic eruption.
HO-2 (Broad Homeowner Insurance)
This type of plan essentially takes everything that’s covered by HO-1 insurance plans and ramps it up by adding an additional 6 perils, for a total of 17 covered causes of damage. These include, in addition to those listed for HO-1: falling objects; structural damage due to the weight of snow, ice or sleet; water damage from an accidental overflow of plumbing systems (sump pumps excluded); rupture of your home’s heater, air conditioner, fire sprinkler, or water heater; frozen plumbing; damage due to power surges.
HO-3 (Special Form Homeowner Insurance)
This is the most commonly used homeowner insurance plan, because it offers coverage on an “everything except” basis. In other words, you can work with your insurance agent to arrive at a list of exclusions, or coverages you don’t need or want, or that the insurer won’t offer you—such as earthquake and flood insurance, which you typically have to purchase separately. With an HO-3 plan, if it’s not listed as an exclusion, you’re covered for it.
HO-4 (Renters Insurance)
This is the type of insurance policy you would take out to cover yourself and your belongings while renting. The HO-4 renter’s policy covers you and your belongings against all of the 17 perils covered in the HO-2 homeowners plan, with the notable exception that it doesn’t pay for damages to the actual rental property itself.
HO-5 (Premiere Homeowners Insurance)
This is known as a “no fuss” policy. Similar to HO-3 in many respects, the HO-5 policy gives you better coverage for your belongings. Whereas HO-3 covers damage done to the structure of your home for everything except the listed exclusions, the personal property contained in your home is only covered by the 17 listed perils. With HO-5, your belongings are fully covered for any cause that’s not specifically excluded.
HO-6 (Condominium Insurance)
Condo owners have insurance needs that differ from those of homeowners, since common areas and physical structures are already insured by the resident’s condominium association. Therefore HO-6 is more limited in scope, offering personal property coverage and liability coverage that doesn’t extend into common areas.
HO-8 (Older Homes Insurance)
If a home’s replacement cost is much higher than its actual market value, it provides certain challenges to insure, which are met by an HO-8 insurance plan. In these situations, if your older home is damaged or destroyed by any of the 17 listed perils, the insurance company will pay the cost of repair or replacement using common materials and methods. For example, if your 19th century home has vintage stained glass windows and they’re destroyed by a covered peril, the insurance company will pay for replacement using modern day methods—such as standard windows—rather than paying what the antique stained glass was actually worth.
