What is the difference between an HO 1 and an HO 2 policy you may need to Google this one !)?
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Different types of homeowners need different types of home insurance. Whether you’re a single-family homeowner, condo owner, mobile homeowner, or renter, there’s an insurance policy designed to protect what you own. We’ll explain what each home insurance policy type covers and how to make sure you get the coverage you need:
Types of homeowners insuranceInsurance companies call the different types of homeowners insurance “policy forms.” The best form for your situation depends on the type of structure you own and the level of coverage you need. There’s also a policy specifically for renters, who only need to insure their possessions.
What each form covers can vary by insurance company and state, but here’s a general idea of the levels of coverage you can purchase based on what type of home you live in. HO-1: Basic formBest for: Bare-bones coverage, where available This basic homeowners insurance policy only covers losses caused by a peril named in the policy. The most common perils covered by an HO-1 policy include:
Few homeowners have this type of policy. An exception is Texas, where it’s called an HO-A policy and provides coverage to homeowners who can’t otherwise get it. Good to know: In designated catastrophe areas with a history of major hurricane losses, homeowners don’t get windstorm or hurricane coverage under this policy and must purchase it separately. HO-2: Broad formBest for: Homeowners who can’t afford an HO-3 policy Homeowners who want more coverage than an HO-1 policy offers might choose an HO-2 policy. You might also opt for an HO-2 policy if you can’t afford a more comprehensive HO-3 policy, or if no insurers in your area offer HO-3 policies. Like the HO-1, the HO-2 form is a named perils policy for your structures and belongings. However, it protects against a greater number of named perils than an HO-1 policy. In addition to the perils covered by an HO-1 policy, an HO-2 policy generally includes coverage for:
HO-3: Special formBest for: Most homeowners The HO-3 policy is the most common type of homeowners insurance policy. For your home and other structures, it’s an open-perils policy, meaning it covers any damages unless the cause of damage is explicitly excluded by the policy. Here’s what’s generally not covered under an HO-3 policy:
Personal property is still covered on a named-peril basis. HO-4: Contents broad formBest for: Renters If you’re a renter, you don’t need coverage for the structure you live in; that’s the owner’s responsibility. However, the owner’s home insurance policy won’t cover your personal belongings, nor will it provide liability protection if someone gets hurt in your unit and sues you. That’s why you need renters insurance. HO-4 policies cover the same named perils that HO-3 policies cover. HO-5: Comprehensive formBest for: Homeowners who want to maximize their coverage If an HO-3 policy doesn’t provide enough coverage for you, an HO-5 policy may be what you need. This type of policy provides open-perils coverage for both the structure and your personal property. It’s more popular than HO-2 or HO-1 coverage, but far less popular than HO-3 coverage. HO-6: Unit-owners formBest for: Condo and co-op unit owners When you own a unit in a condominium or co-op building, the condo association will carry a master insurance policy that covers the building’s exterior and common areas. However, the building policy won’t cover the improvements to your unit or your personal possessions, nor will it offer you personal liability coverage. When you’re buying an HO-6 policy, or condo insurance, you’ll first need to learn exactly what your building’s master policy covers. Then, you’ll want to find a unit-owners policy that picks up where that coverage leaves off. Pay close attention to coverage for special assessments. It can be a major asset if the building experiences covered losses beyond what its insurance and reserve funds can pay for. When the association asks its members to help cover the shortfall, you can turn to your policy instead of your savings account. HO-7: Mobile home formBest for: Mobile home owners If you own a mobile home, you’ll want this insurance for your dwelling and personal property. It provides similar coverage to an HO-3 policy. An HO-7 policy may not automatically cover your home while it’s in transit, however, so if you anticipate a move, check to see if you’ll need supplemental coverage. Find out: How Much is Mobile Home Insurance? HO-8: Modified coverage formBest for: Owners of old homes HO-8 policies provide very limited coverage, similar to an HO-1 policy, but are even less popular. You’re most likely to encounter this policy in Oklahoma, Mississippi, and Arkansas. HO-8 policies are designed to insure homes that would cost much more to replace than they’re currently worth. For example, think of a home built in the 1880s with materials and features that aren’t common today — and the home is in a neighborhood that’s no longer popular, so its value is depressed. In addition, an HO-8 policy may be the only option available for homes that don’t meet insurers’ risk requirements for other policy forms. Additional insurance policy optionsNo matter which of the above forms your policy is based on, you might want supplemental coverage for certain situations. These are some common options:
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What type of homeowners insurance policy is right for me?The right homeowners policy for you will depend on what type of home you live in, how much it would cost to repair or rebuild, and how much your personal possessions are worth. It often makes sense to purchase the highest level of protection you can afford — especially If you don’t have much money saved for emergencies. While a more comprehensive policy with a lower deductible will have higher premiums, it will also give you the coverage you need to get back on your feet quickly after a major loss. As you accumulate more savings, you may be able to increase your deductible to lower your premium. However, sometimes policy pricing works out such that a $1,000 deductible may not be much more expensive than a $5,000 deductible. In that case, you’ll almost certainly be glad you paid a bit extra if you ever have to file a large claim. To get the best coverage for your budget, we recommend shopping for a policy with multiple carriers. Credible makes this process easy. Best of all, it’s fast, free, and won’t result in unwanted phone calls. Compare home insurance from top carriers
Get Insurance Quotes Now Dislaimer: All insurance-related services are offered through Young Alfred. About the author Amy Fontinelle Amy Fontinelle is a mortgage and credit card authority and a contributor to Credible. Her work has appeared in Forbes Advisor, The Motley Fool, Investopedia, International Business Times, MassMutual, and more. Read More What is an HOAn HO-2 insurance policy covers homeowners on a named perils basis. This means that your policy will only cover damage caused by a peril that is specifically listed in the policy. If your home is damaged by an occurrence that is not specifically listed, it will likely not be covered.
What is an HOAn HO-1, or "basic form," is a policy that typically helps cover 10 perils (compared with the 16 perils covered by an HO-3). For example, falling objects or the weight of ice are perils not covered by an HO-1 form, the III says.
Which of the following perils is covered by the HOBelow are the 16 named perils covered by an HO-2 policy. HO-2 policies are uncommon.
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What does an HO-2 policy cover?. What is the difference between HO5 and HO6?For HO3 policies, it's common to see open perils coverage for your home itself and named perils for your personal property. HO5 policies feature open perils coverage for both. If you're a condo owner with an HO6 policy, you're covered for everything inside the walls of your place for named perils.
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