A home is the most valuable asset most people buy in their lifetime. Getting home insurance is the first thing the homeowner should do to protect their investment.
A homeowner’s insurance policy can help make sure that in the case of any catastrophic event, you will not face large out-of-pocket expenses.
Home insurance protects the property of the policyholder, its contents, and other belongings in case of fires, burglary, injuries, and in some cases, natural disasters.
A standard homeowner’s insurance policy commonly known as an HO-3 policy will defend you from consequences of incidents like fires and storms. A standard policy will also protect your property from these disasters as well as theft (with some limitations).
In this article, all of the information you'll need to choose a homeowner's policy and what to consider when selecting the right product for you.
How Home & Renters Insurance Works
Home insurance works very differently than other insurances. Typically, you'll be offered home insurance based on the value of your home.
If anything unfortunate or devastating happens to your homes, such as burglary, vandalism, storm damage, water damage, or fire, a homeowner’s insurance policy can help pay to fix or restore your living unit and/or garage.
Moreover, homeowner’s insurance protects personal possessions, such as clothing and furniture, that are stored in your home or property.
Home insurance can also cover things such as high-value products such as fine jewelry, but this coverage may not be included in a standard policy.
Home insurance companies offer different policies that will cover you with different benefits and restrictions. If your policy doesn't meet your needs, you can change your home insurance provider.
Home Insurance Coverages
Here are the types of home insurance plans that are usually offered:
Basic Homeowners Policy, HO-1
This is a basic policy that protects the homeowner from 10 common hazards such as fire or smoke, explosions, flares, and volcanic eruptions.
Broad Form Policy, HO-2
The Broad Form policy includes protection from all of the basic policy's 10 hazards, plus a few more, such as electric-current collisions. It covers your house structure, your personal possessions, and personal liability.
Special Form Policy, HO-3
This policy includes all of the Broad Form policies, with the addition of coverage if in any circumstance you damage or harm somebody's property.
Tenant’s Form, HO-4
This type of home insurance policy is generally known as insurance for renters. It protects your personal belongings and your financial responsibility if you are a renter.
Comprehensive Form, HO-5
This policy is comprehensive in that it addresses more risks than other policies. This policy is similar to the Special Form policy because it would cover you from all hazards financially except those clearly defined as not covered by your policy.
Condominium Unit Owners Form, HO-6
It is for condominium-unit owners and/or tenants/renters. This protects your personal property and walls, floors, and ceilings against all hazards and also provides coverage up to defined limits for damage to additions and/or modifications that may have been made by the unit owner. This coverage for alterations usually only kicks in after any insurance limits are reached by policies (if any) purchased by the condominium association.
Mobile Home Form, HO-7
This is similar to the Special Form policy except for mobile homes specifically. Mobile homes do not have the same insurance coverage as traditional homes.
Older Home Form, HO-8
This policy is for older homes where the reconstruction costs are greater than the market value. It addresses the same set of hazards as Basic Homeowners policy.
Dwelling Fire Form
This policy only protects your house, and only for a few different hazards. This does not protect your personal property, your personal responsibility, or your medical expenses. This coverage is a popular Holiday Homes alternative. It's also the kind of restricted policy that your mortgage lender is going to buy for you if you let the policy of your homeowner run out.
Best Homeowner Insurance Providers
The below are five insurance companies that offer comprehensive insurance plans for your home.
State Farm is a major insurer covering nearly 83 million US policies and accounts. State Farm goes beyond and beyond just repaying you with its Premier Service Program for home insurance claims.
The program will link you to one of its participating contractors for water control, flooring, general contracting, or roofing services if your home needs any repairs.
Liberty Mutual provides standard homeowners coverage as a base, but it also offers the option of adding many upgrades, including well-priced jewelry coverage, home computer and electronics upgrades, and identity theft.
Amica Mutual with its Enhanced Home Insurance Policy provides tailored policy options and an all-risk coverage for both the home and the contents inside.
Erie Insurance provides a wide variety of forms of insurance house, car, apartment, hotel, mobile house, motorcycle, boat, life. Loyal customers benefit from multi-policy discounts.
Before you purchase insurance coverage for your home, make sure you understand all the terms and conditions on the policy contract to make sure you're getting the best deal and the coverage you need.