
Types of Home Insurance Policies: Which One Is Right for You?
Homeowners insurance is an essential investment for anyone who owns their residence. While not legally required, these policies are critical in ensuring homeowners and their families can endure the financial hardship of various incidents. The right insurance can cover burglaries, fires, weather-related perils and personal liabilities, but knowing which type of policy to select can be complicated.
Types of Homeowners Insurance 
Also known as home insurance, these policies can come in many forms, each of which can be customized to suit an individual’s specific needs. When first addressing coverage needs, homeowners can begin by determining which of the following templates may be suitable to start with:
- HO-1—These policies are the most basic type of homeowners insurance and may offer such limited coverage that they are not even available in some states. They typically list several specific named perils, such as fires and lightning, and include coverage for only the structural elements of a home, such as its roof, walls and foundations.
- HO-2—This is the next step up in coverage for homeowners and generally includes coverage for the structure of a home, as well as the policyholder’s personal property, such as furniture and electronics. Policies may also cover liability for third-party losses, such as guests’ injuries or neighbors’ property damage.
- HO-3—As the most common type of home insurance, these policies are often referred to as standard coverage. They generally include the same financial protections as HO-2 policies while also potentially assisting with additional living expenses should your home be temporarily uninhabitable. Additionally, HO-3 insurance lists specifically excluded perils, such as floods and earthquakes, rather than naming them as is the case in HO-1 and HO-2 offerings.
- HO-4—This form of homeowners insurance is also known as renters insurance. These policies exclude coverage for the exterior structure of a home, which is generally insured by the landlord or rental property company. Rather, renters insurance focuses on insuring personal possessions and liability risks.
- HO-5—These policies generally offer the most robust coverage available for homeowners. If you have a high-net-worth home, particularly valuable belongings or a property with complicated architectural elements, the increased coverage limits of HO-5 insurance may be suitable.
- HO-6—This may be the right choice if you own a condo or co-op unit. These policies function similarly to HO-4 insurance in that they do not include coverage for the exterior or common areas of your building. However, since you own your home, these policies can offer coverage for interior elements you might upgrade or renovate yourself.
Other forms of coverage, including coverage designed for modular homes and older homes, may also be suitable for your dwelling. Contact us to learn more about the available options.
Homeowners Insurance in Sanger, CA
Contact Academy West Insurance today to learn more about coverage options for your home or to get a free quote.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.
Categories: Homeowners