Consumer Advice, Realtor Advice

The Different Levels of Homeowner’s Insurance: What You Need to Know

homeowners-insuranceMost standard homeowner’s insurance policies cover damage to your home from theft, fire, lightning, smoke, frozen pipes, ice or certain types of weather damage. It usually covers you up to a certain dollar amount if someone is injured on your property and decides to sue you.

But, did you know that there are many “levels” and “types” of homeowners insurance? Here are your options:

  • HO1: It’s the most basic with limited coverage. It’s also the cheapest, but if you have a mortgage, most mortgage companies won’t accept the limited coverage because it hardly covers anything.
  • HO2: Has a lot more coverage than HO1, but still limited reimbursement if you experience a loss.
  • HO3: This is the most popular with almost 80% of the homeowners’ policies sold today. This option covers “all perils and all risks” except those that are “excluded” in the addendum.
  • HO4: This is a “renter’s” policy and it protects the possessions of tenants living in the home against loss. It usually includes medical and liability coverage for the renter. So if you own a rental property, you may want to advise your tenants about this option.
  • HO6: This policy is for those who live in condos. It not only provides for personal property, liability and medical expenses, it covers the inside walls of your unit—which you own.
  • HO8: This is for older homes and is similar to HO1. The difference is that it will reimburse the actual cash value of the home.

If you’d like to compare coverage and premium amounts, please let me know and I can refer you to a couple of insurance agents that I know and trust.

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