If you’re a new homeowner, you probably already know how important homeowners insurance is for protecting your investment. However, you might not be aware of the different types of home insurance, each of which covers certain perils. This guide explains key differences, so you can make the best possible decision when purchasing coverage for your home.
3 Types of Homeowners Insurance and How They Can Protect You
1. HO-1 and HO-2 Insurance
All homeowners insurance policies have certain perils that are covered should they occur. With HO-1 and HO-2 policies, your coverage is limited, which is why these policies are less popular. With HO-2, you’ll only be covered if damage to your home is caused by one of the 16 perils listed, which includes things like fire, theft, falling objects, and other occurrences. HO-1 has an even smaller list of covered perils, so it’s not purchased by many homeowners.
2. HO-3 Insurance
This insurance greatly expands the coverage offered by HO-2 insurance. Your dwelling will be safeguarded against all occurrences unless they are explicitly excepted in policy documents (this is usually the case with damage caused by flooding or earthquakes). The list of 16 perils does apply, but only to your personal belongings. That means you’ll only be compensated for the loss of belongings if they were damaged by fire, theft, falling objects, and other listed occurrences.
3. HO-5 Insurance
While there is HO-4 insurance, it applies to people who rent the dwellings they reside in. With HO-5 policies, both your belongings and residence will be safeguarded against all perils unless there are explicit exceptions listed in policy documents. Not all homeowners can purchase HO-5 policies, however. The insurer will need to assess the condition of your home as well as the risks it faces to determine whether an HO-5 policy is applicable.
If you still have questions about which homeowners insurance is right for you, working with a trusted insurance agent is a must. With more than two decades of experience, Russell Insurance Agency is proud to offer top customer service to people throughout Robertsdale, AL. Their experience allows them to identify your risks and recommend the proper coverage. Request a quote today by calling (251) 947-3607, or visit them online for homeowners insurance tips.