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Types of Home Insurance Policies – Understanding Your Options

Home insurance policy covers a wide combination of liability and property, and provides insurance for loss of use due to damage. The various terms being used for standard home insurance policy has been provided and defined by the ISO or Insurance Services Office, so the basic policies are not really going to vary much from one company to the other, although quotes will.

There are many basic policies included in homeowners insurance policy, and these are the following:

Homeowners Basic Policy-1

Basic policy is known as HO-1. This home policy basically covers the house including all its fixtures. This also includes valuable items against 10 various declared perils. Today, this policy has been discontinued by many insurance company in many states due to redundancy.

Homeowners Basic Policy-2

Basic Policy-2 or HO-2 is also known as Broad HO Policy, which covers the house and every item that's within the house against 16 different perils.

Homeowners Basic Policy-3

Basic Policy-3 or HO-3 is known as the Special HO Policy, which covers all known hazards except for those specifically cited by the insurance company as void events.

Homeowners Basic Policy-4

HO-4 is known as the renter HO policy, which covers 16 specifically declared dangerous accidents and events that also include coverage liability coverage. Although this policy covers a person's liability, this does not ensure a person of dwelling itself.

Homeowners Basic Policy-6

HO-6 is a basic insurance policy that is intended for condominium and co-ops owner. This policy basically protects and covers personal property, specific coverage of unit enhancement and liability coverage.

Most insurance companies coordinate with condominium owners or through the various associations, which includes insurance to the actual structure.

Homeowners Basic Policy-8

HO-8 is known as a basic policy for old and vintage homes. This policy functions the same as the HO-2, which also covers the same perils. The only difference between the two is the amount of cost that needs to be paid.

HO-8 requires only payment for actual cash value or for any repair cost, since the amount of these replacements cost could transform the policy into a costly insurance. This policy is most ideal for older homes whose overall market value is considerably low than the amount of cost needed to rebuild it.

Events/Perils/Hazards that are covered in your Basic Policy 2, 3, 4, and 6:

  • Lighting and/or Fire
  • Riot events or civil disturbance
  • Hail and/or Wind Storm
  • Losses and damages caused by planes and various aircrafts
  • Losses and damages caused by motorized vehicles
  • Smoke
  • Explosion
  • Malicious mischief or vandalism
  • Losses and damages caused by falling objects
  • Sleet, weight of ice, or snow
  • The freezing of plumbing, automatic air conditioning, sprinkler system for anti-fire purposes, or home appliances
  • Unwanted accidents and sudden damages from artificially generated electrical source (this does not include transistor or any other similar component)
  • Unwanted accidents and sudden damages from cracking, burning, being torn apart, heating water system, air conditioning or automatic anti-fire system
  • Accidental overflows or discharges of steam or water from air conditioning units, plumbing, heating, automatic anti-fire system, or from various home appliances
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