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Definitions of Types of Home Insurance Coverage

hic-5Home insurance has seven basic types of coverage, and like so many things consumers buy these days it’s vital to be aware of the different types of home insurance coverage because otherwise you may not obtain the type of insurance coverage you need in case of a claim.

According to the Insurance Services Offices, Inc., the standardized home insurance forms are in 7 different types. The definitions are defined through seven abbreviated standards (HO1, HO2, HO3, HO4, HO5, HO6, and HO8). To help you better understand here is a list and brief description of the 7 types of home insurance policies:

1- The Basic Form (HO1) – This is the most basic of all types as the name suggests. It provides protection for both your home and contents against many natural disasters such as: 1 windstorm or hail; 2 vandalism or malicious mischief; 3 fire Slash Your Home Insurance Premiums. Search for Lower Rates
or lightning; 4 explosion riot or civil commotion; 5 damage from vehicles; 6 theft; 7 glass breakage; 8 personal liability; 9 volcanic eruption; 10 smoke; 11 damage from aircraft.

2- The Broad Form (HO2) – This is similar to the first type, with the only difference being the addition of a number of disasters that are covered.

3- The Special Form (HO3) – If you have a single-family home then this is the one that you should ask for when inquiring about home insurance. This type of insurance covers all risks except for earthquake and flood damage, including contents.

4- The Tenant’s Form (HO4) – Yes, your personal property can be covered even if you are only renting a house. The same perils as indicated in HO2 or HO3 are covered for your personal properties.

5- The Premier Form (HO5) – This is an expanded form of HO3. In here, you can claim loss against an open peril. This means that whatever the cause of loss of your house or personal property may be (unless otherwise specified in the policy that it is excluded), it can be covered.

6- The Condominium Policy Form (HO6) – This policy is designed for condominium owners and usually covers the interior belongings of a condo unit.

7- The Older Houses Form (HO8) – This is what they call “Modified Coverage.” The reason for this is that an older house has a much greater risk of loss or damage due to fire or older electrical and plumbing systems. As such, most insurance companies reimburse the actual cash value most of the time because it is much cheaper instead of paying the replacement cost.

Homeowners can actually save money if they get several home insurance quotes. It is less expensive since agents are competing for your business. This is the reason why it is very important to educate yourself so that you can make an informed decision purchasing home insurance coverage.