A Simple Guide on the Different Types of Homeowners Insurance

Whether you’re worried about a stray lightning bolt igniting your house or coming home to find all your worldly possessions swiped, getting homeowners insurance should be a no-brainer. Trouble is, with the sheer magnitude of types and variations swirling around out there, it can feel daunting to sift through them all to find the one that’s right for you.

So who can help you sort through all the chaos?

Funny you should ask because that’s where we come in. It’s time to crack open our guide to the different types of homeowners insurance! Without further ado, let’s get right into things.

HO-1 to HO-3: The Basics

The most simple and small-scale of all the homeowner’s policies rests at the beginning, with HO-1. This “little policy that could” takes the cash value of your house and assigns coverage based on that. 

This policy only protects from 10 things: vehicles, smoke, fire, lightning, airplanes, riots, defacement from vandals, volcanoes, thieves, and harsh weather. If the damage doesn’t come from one of these 10 events, you’re not seeing a cent for it. 

The narrow scope makes this unpopular with insurance companies, and you’ll only see it offered as a rare option. HO-2 is the preferred upgrade on that, adding protection from ice, falling objects, steam, and snow to the table.

Random tears in the house due to accidents or electrical damage also get covered. 

Of course, their protection pales in comparison to the mighty HO-3. Rather than list what the policy protects you against, HO-3 instead lists things it doesn’t protect you against. This policy also protects your home and personal belongings (though only your belongings get reimbursed for their cash value).

This allows you to customize it based on region and accident likelihood. For example, those who live in California would want to grab earthquake protection as part of their HO-3 while someone in New York might not. 

HO-4: For the Renters

Of course, even renting a property doesn’t get you out of a visit to the home insurance agency. Most landlords will mandate you to pick this policy up, which protects your belongings at cash value if they are damaged/stolen inside or outside of the apartment. 

That said, HO-4 insurance carries many of the same “doesn’t count if we list it” specifications the HO-3 has too. On the flip side, HO-4 sometimes will give you a financial backup if you can’t stay in your apartment due to damage not caused by one of the exclusions. 

HO-5 to HO-8: The Eccentric Lot

HO-5 sits as the more expensive upgrade to HO-3. In exchange for more money, insurance companies will grant your belongings the same level of protection as your house. In addition, the cap on how much certain personal belongings can get financial compensation for (like jewelry) gets a boost.

HO-6 provides insurance for condo owners, letting them insure their specific part while the condo association handles the general space between. Similar to the HO-2, the policy only protects against listed threats. 

HO-7 exists for mobile homeowners (i.e, RVs, trailers, etc.). While you get Protection for everything but listed threats on the mobile home itself, anything outside only gets protection from a set list of damages. 

Finally, HO-8 acts as a version of the HO-1 designed for older homes that wouldn’t mean standard insurance requirements for coverage (like a broken roof or old pipes). With value determined by the cash value of the house over replacement value, this is useful for people who want to keep their house like an artifact out of time, free of changes.

Which of These Types of Homeowners Insurance Will You Choose?

And there you have it! Now that you have this list of the different types of homeowners insurance, you’re ready to pick the policy that fits your property best!

But what if you need more help navigating the tricky world of insurance? In that case, make sure to stop by our site again to read more of our blog posts!