From floods and fire to theft to vandalism, there are a lot of things that can damage your property. Homeowners insurance makes sure you have the coverage to reimburse you for losses that come about unexpectedly, but you have to have the right type of homeowners insurance in place beforehand.
Types of Homeowners Insurance
Homeowners insurance is often referred to by the abbreviated form name that it’s submitted on, starting with “HO.” Of the eight types of coverage, six are applicable to homeowners.
HO-1 The most stripped-down insurance possible covers only against 10 of the 16 perils, or losses, you could experience, leaving you with gaping holes in your coverage. HO-1 is a limited coverage policy, but it’s no longer available in most states.
HO-2 An upgrade from an HO-1 policy, the basic policy now available for most policyholders is HO-2. It provides protection against all of the 16 perils to some degree. This type of homeowners insurance covers your dwelling at replacement cost and actual cash value for personal property.
HO-3 By far, the most common homeowners insurance policy is HO-3. It’s often called a special form policy that also covers all risks, like an HO-2, but can be modified to exclude some common perils like power failure, wear and tear, and mechanical breakdown.
HO-5 The most complete type of homeowners insurance you can get is an HO-5, or comprehensive form insurance. Under an HO-3, your dwelling and personal property are insured for replacement value for all risks. Higher coverage limits are usually part of an HO-5, and this type of policy is normally sought after by owners of high-worth properties.
HO-7 Since a mobile home is different than a permanent dwelling, it’s also insured differently. Mobile home insurance is considered an HO-7 policy but it carries much the same comprehensive format as an HO-3 form. You can insure single-wide and double-wide manufactured homes and mobile homes, travel trailers, park model homes, RVs, and sectional homes under this type of policy.
HO-8 If your home isn’t up to the normal standards as required for an HO-2, HO-3, or HO-5 policy, you could still get insurance through an HO-8 policy. Designated for older homes, losses are calculated on actual cash value, not replacement value, in most cases.
If You’re a Renter
Renter’s insurance is a must for many rental properties, whether it’s an apartment, townhouse, or single family dwelling. Without it, you may not have any coverage in a loss. Renters can get an HO-4 renter policy that offers similar comprehensive coverage for your possessions in your home when the title of the property isn’t in your name.
Insurance for Condos or Co-ops
And if you’re in a condo or co-op, the type of coverage is different yet again. Since you legally own a portion of the structure, keeping a minimum level of insurance coverage is likely mandatory by the association. It’s an [HO-6 condo/co-op policy](https://getjerry.com/advice/what-is-an-ho-6-insurance-quote-by-liliana-pina( that you’ll be getting, and it provides protection against all 16 perils for both structure and personal property.
Regardless of which type of homeowners insurance you need, your mortgage provider will typically want you to carry a minimum amount of coverage so their financial interests are protected in the case of a loss. It’s a good idea to get extended replacement cost to provide extra financial protection if you suffer some sort of unfortunate damage.