Homeowner’s insurance or HOI is a must for every home owner. A bit obvious, right? A home insurance policy otherwise known as a HO policy is made to allow the home owner to protect their personal belongings and their home. Keep in mind that home owners are responsible for protecting their personal property and their home. But the option to have insurance should definitely be taken. As a home owner, you could be sued if a guest is injured on your property. That is because you could be found to be negligent in the duty of care that you owe your guests. And in the event that your home is damaged, you would have to find accommodations. These are just a few of the reasons that you should consider when you purchase a home insurance policy.
Types of House Insurance
Basic Homeowner’s Insurance
The first type of home insurance is basic house insurance. This policy is used to insure a property against approximately eleven hazards of nature. Some of these include lightening, fire, vandalism, snow, ice, theft, volcano eruption, riot and windstorm hail. This type of insurance is commonly referred to as HO1 and it has decreased in popularity over the years as it really provides no protection against damage or loss of property due to issues with plumbing that occur as a result of freezing. Another thing that is not covered is damage as a result of a malfunction in the heating system. Most states no longer provide this type of coverage as an option.
Broad Homeowner’s Insurance
A stepped up version of the basic house insurance policy is the HO2. The Broad Form Homeowner policy has a wider range of coverage. This option provides protection from approximately seventeen types of damage which includes the eleven hazards covered in basic as well.
Special Form Homeowner’s Insurance
A next option that can be looked at is the popular property insurance. This is a better option for persons that live in areas that are earthquake or flood prone. It is dubbed the HO3 and is the most typical comprehensive insurance used for single family homes. It not only gives the homeowner flood protection and earthquake protection along with peace of mind but provides protection in the event that a homeowner is being sued by persons that have had an accident on the property. Any damage done to personal property and the home is also covered. Where damage done to the home is concerned the insurer will pay an amount that is the same as the cost of replacing the property. If it is personal property then the homeowner is supposed to receive an amount equal to the cash value of the property.
If you live in an older residence where the cost to replace is more than the current market value of the property or if your home has depreciated for other reasons, there is a modified home insurance called the HO8.
What did you consider when you first purchased your home? Did you know what type of insurance to purchase?
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