Owning a home is a major commitment and a great investment. For this reason, having a good homeowners insurance policy is a must. If you are new to owning a home, or if you are worried your current policy isn't comprehensive enough, check out these four common homeowners insurance policies for single-family homes.
A basic form for HO-1 policy covers 10 common perils, including fire, lightning, windstorm, hail, smoke, theft, damage from aircraft/vehicles, explosions, riots, and vandalism. This type of policy is a named-perils policy, which means it only covers what is listed in the policy. Anything that is not included in the policy is not a covered peril.
Common perils it does not cover include freezing/leaking pipes or falling objects. In addition, while it covers the home and attached structures, it does not cover personal property, liability, or living expenses if you can't stay in your home. For this reason, many insurance carriers no longer offer a basic form policy.
Also known as an HO-2 policy, a broad form policy is a step above a basic form policy. It is also a named-peril policy and covers the same 10 perils plus a few extras: leaking pipes, freezing pipes, falling objects, weight from ice, sudden damage from electrical currents, and damage to some household systems. In addition, it also covers your personal belongings in the event of a covered disaster.
HO-3/special form policies are the most common type of homeowner policy. This type of policy covers the home and personal belongings. The part of the policy that covers the home is an open-perils policy. This means you can assume everything is covered unless it is included in the "Exclusions" section of the policy. Common exceptions include foundation issues, flood, earth movement, neglect, and animals.
Your personal property, however, is only covered for named perils. Luckily, the named perils include everything mentioned in the broad form policy, but it also covers water damage from the plumbing or HVAC system.
A comprehensive form (HO-5) policy for homeowners is the most robust policy for single-family dwellings. It covers the home and personal property, but it also provides coverage for liability, medical payments for others, and living expenses if you can't stay in your home.
Comprehensive form policies are also open-peril policies, and while they may cover more than HO-3 policies, they still often exclude damage from earth movement, mold, war, and pets.
Your home is an investment that needs to be protected, and one of the best ways to do that is with a good insurance policy. If you are ready for a quote, contact a homeowners insurance carrier in your area today.