Different Types of Home Insurance Policies
A person who owns his or her home would have a different policy from someone who rents. Policies also differ on the amount of insurance coverage provided.
The different types of homeowners insurance policies are fairly standard throughout the country. However, individual states and companies may offer policies that are slightly different or go by other names such as ‘standard’ or ‘deluxe’. The one exception is the state of Texas, where policies vary somewhat from policies in other states. The Texas Insurance Department has detailed information on its various homeowners’ policies. You should consult with a professional insurance consultant to determine which coverages best suit your needs
If you own your home
If you own the home you live in, you have several policies to choose from. The most popular policy is the HO-3, which provides the broadest coverage. Owners of multi-family homes generally purchase an HO-3 with an endorsement to cover the risks associated with having renters live in their homes.
HO-1: Limited coverage policy
This ‘bare bones’ policy covers you against the first 10 disasters. It’s no longer available in most states.
HO-2: Basic policy
It provides protection against all 16 disasters. There is a version of HO-2 designed for mobile homes.
HO-3: The most popular policy
This ‘special’ policy protects your home from all perils except those specifically excluded.
HO-8: Older home
Designed for older homes, this policy usually reimburses you for damage on an actual cash value basis which means replacement cost less depreciation. Full replacement cost policies may not be available for some older homes.
If you rent your home
Created specifically for those who rent the home they live in, this policy protects your possessions and any parts of the apartment that you own, such as new kitchen cabinets you install, against all 16 disasters.
If you own a co-op or a condo
A policy for those who own a condo or co-op, it provides coverage for your belongings and the structural parts of the building that you own. It protects you against all 16 disasters.