What Type of Home Insurance Do I Need?

Written by admin on October 21, 2022 at 12:47 PM.

There are eight different types of homeowners insurance policies for various home types and coverage needs. It might be difficult to parse when you think about what kind of home insurance type you’ll need. In this article, we will break down the different kinds of homeowners policies typically offered by insurance companies, in an effort to help you better understand them. 

HO-1 Policy: Basic Form Homeowners Policy

This type of insurance seems to be on its way out; some insurance companies don’t even offer it anymore. According to MoneyGeek, it made up just 1.62% of active insurance coverages in 2019. With an HO-1 policy, your home and personal belongings are covered at their actual cash value. HO-1 policies only protect your home against 1- specifically named perils that cause losses or property damage.

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damage from Aircrafts
• Vehicles
• Smoke
• Vandalism
• Theft
• Falling objects

HO-2 Policy: Broad Form Insurance

Broad Form HO-2 Policies are an upgrade to HO-1 and cover everything described above plus an additional 6 named perils. HO-2 is dwelling coverage at its replacement cost value, and your personal property at its actual cash value.

Additional Perils:

• Weight of ice, snow, or sleet
• Accidental discharge or overflow of water or stream
• Sudden and accidental tearing apart, cracking, burning, or bulging of a built-in appliance
• Freezing
• Sudden and accidental damage from an artificially generated electrical current
• Volcanic eruption

HO-3 Policy: Special Form Insurance

The most common type of homeowners insurance type, accounting for 77.68% of coverages bought in 2019 (via Nerdwallet), HO-3 policies account for the vast majority of single-family homeowners insurance. HO-3 policies cover your home at its replacement cost and your personal property at its actual cash value. Most insurance companies will let you add a replacement cost endorsement to your personal property coverage

HO-3 policies provide all-risks coverage for your home and cover your personal property from the same named perils in HO-1 and HO-2 policies. Open-perils coverage, means you’re covered for everything except the causes of loss that are specifically excluded in your policy – this usually includes flooding, mold, and cases of neglect among other things.

HO-4 Policy: Renters Insurance

Better known as “renters insurance”, HO-4 policies are specifically for those who rent their home or apartment. HO-4s cover the same 16 named perils found in the broad and special form policies. This includes personal property anywhere in the world, for example, should you have your property stolen while on vacation, it would be covered. 

Like HO-3 policies, renters insurance also offers liability coverage and additional living expenses, should you be forced to stay anywhere else like a hotel after your apartment is damaged. Unlike HO-3s, however, this insurance policy does not offer dwelling coverage, as that is the landlord’s responsibility.

HO-5 Policy: Comprehensive Form Insurance

Comprehensive owners insurance is the most robust plan offered by insurance companies. This is usually for high-value properties in high-risk areas. They essentially work as an upgraded HO-3; dwelling and personal property are insured at their replacement cost by default. HO-5s also provide high coverage limits for expensive types of property.

HO-6 Policy: Condo Insurance 

This type of insurance is for people who live in a condominium or co-op. HO-6 policies often vary in coverage. It depends on what’s covered by your condo association’s HOA insurance.

You’ll likely need enough dwelling coverage in your condo policy to cover the cost of upgrades that you made. Your condo policy also includes personal property, loss of use, personal liability, loss assessment, and medical payments coverage.

HO-7 Policy: Mobile Home Insurance

Essentially an HO-3 policy, but designed specifically for mobile homes, which can’t be covered under a normal single-family home policy, HO-7 policies cover multiple types of mobile homes including 

• Trailers, travel trailers, fifth-wheel trailers
• Single-wide manufactured mobile homes
• Double-wide mobile homes
• Sectional homes
• Modular homes
• Park model homes and RVs

HO-8 Policy: Modified Coverage Form Insurance

HO-8 homeowners insurance is designed for homes that don’t meet the insurance company standards required for most types of homeowners insurance. This usually applies to older homes that are considered high-risk due to a lack of updated maintenance. For example,  if the roof is not up to code, you’ll either need HO-8 insurance, or you’ll need to replace it to qualify for an HO-3 policy. Similar to basic form policies, it covers named perils, and reimbursement is determined by the home’s actual cash value rather than replacement cost.

HO-8 policies are great because your home can be covered without full updates if you’re intent on keeping the home exactly the way it was when it was first built, despite any added risk.

Still Confused? Consult Your Insurance Agent.

If you’re still not sure which home insurance type is best for you, consult an agent about which policy would be best for you. They can further help describe policy limits and what additional coverages will be available to you. 

When Insurance Isn’t Enough, Contact A Public Adjuster

Now that you’re familiar with the eight homeowners insurance policy types, it’s important that you know your coverages and in case of home damage, contact a public adjuster. Stellar Public Adjusting helps clients get more money from their insurance companies, making sure that they are paid what they’re owed. 

Contact us today if your property has suffered any damage, at Stellar Public Adjusting, we work for you. Call our office at (888) 987-8355, Stellar Adjusting is open 24 hours per day, 7 days per week.