As a homeowner, there are different types of insurance policies that you’ll need to purchase in order to protect your investment. The type of property you have and the area you’re living in are just some of the influential factors that will determine which types you’re required (or recommended) to buy. Different types of home insurance include:
HO-0 (Dwelling Fire Form)
This type of homeowners’ insurance protects your property against explosion, smoke, fire, windstorm, lightning, hail, cars, and civil unrest. However, your personal liability and personal property is not covered under this type of policy, and neither are medical costs. Your mortgage lender will purchase this type of coverage on your behalf if you have another homeowners’ insurance policy that lapses.
HO-1 (Basic Form)
This is the most basic type of homeowners’ insurance that is available, but it is now rarely offered, due to the affordability and availability of plans that offer more coverage. With this type of coverage, your property and everything inside is protected against 11 different “perils,” whereas other plans will offer coverage that protects against 17 different ones. In this policy, the 11 perils protected include hail, fire, lightning, riots, windstorms, explosions, smoke, aircraft, cars, volcanic eruption, theft, and vandalism.
HO-2 (Broad Form)
This type of coverage basically takes everything that’s protected in HO-1 insurance policies, but instead offers protection against the 17 perils as mentioned above. In addition to the perils listed for HO-1, HO-2 insurance will also protect against rupture of your property’s air conditioner, fire sprinkler, heater or water heater, structural damage due to natural elements (such as snow, ice, and sleet), frozen plumbing, water damage due to plumbing system overflow, and damage as a result of power surges.
HO-3 (Special Form)
This is the most popular type of homeowner insurance policy, as it provides protection on an “everything except” basis. Basically, you can work with your insurer to come up with a list of protection for what you care about, or exclusion for things you don’t (or would otherwise need to purchase separate coverage for).
HO-4 (Contents Broad Form)
This type of coverage will protect your personal belongings when you rent a home; it’s most commonly referred to as renters’ insurance. The coverage offered by this plan protects the 17 perils listed in the HO-2 homeowners insurance policy, but doesn’t cover the actual home itself.