What if you doomed your new home by saying a single word?

Most people say “no” to many extra kinds of homeowner’s insurance, and it’s tough to understand the benefits and drawbacks of all the available types.

That’s why we put together this complete guide. Keep reading to discover if your home needs some additional protection!

Versatile: HO-3

We figured it’s best to start with the most common form of homeowners insurance, HO-3, or “special” insurance.

What makes this insurance so special? It encompasses everything in the HO-2 (more on that in a moment) and protects against any perils not named.

For example, a policy may specify that it does not protect your home from flooding. If an HO-3 policy does not mention flooding and your house gets flooded, then you are covered. This insurance protects things attached to your home (such as a garage). It also offers liability insurance against accidental injuries while still protecting all of your possessions inside the home.

While it is not as thorough as comprehensive insurance, HO-3 is relatively affordable. These factors combined are why it is so popular nationwide.

Simple: HO-1

While the HO-3 is the most popular form of home insurance, it’s not the most basic form. That honor belongs instead to the HO-1.

Remember how the HO-3 protects against any perils not named? The HO-1 is the exact opposite: It protects only against named perils. While the exact perils may vary, this insurance typically protects against things like fire, vandalism, theft, and hail. However, you’ll quickly notice some limitations.

For example, it may protect against lightning and hail but not against flooding. So, while this policy is the cheapest, you must weigh whether those limitations will mean you pay more in the long run.

Broader: HO-2

It’s easy to describe the HO-2 insurance plan. We like to call it “simple plus.” It covers everything that was already covered in the HO-1 policy, then adds items including protection from freezing, water discharges and accidental electrical damage. You even get protection from more exotic threats such as falling objects.

Sometimes, you may receive additional perks such as personal liability protection, but it ultimately shares the limitation that you have no protection against anything not named.

Comprehensive: HO-5

If the HO-2 is “simple plus” insurance, then the comprehensive HO-5 plan is “special plus.” This means you are getting all the benefits of HO-3 along with some extra bells and whistles.

For example, you get better protection for your possessions, and you can get personal liability insurance as comprehensive as you need, though you will pay for this enhanced coverage. Keep in mind that “comprehensive” insurance still has limitations. You typically aren’t protected against floods, settling, mold and water damage, along with neglect or other self-caused problems.

Renter’s Insurance: HO-4

So far, we have focused only on homeowners insurance. However, those who rent shouldn’t feel left out, as they have special insurance. HO-4 insurance is designed for those who rent. It only offers coverage for personal liability and personal belongings.

If you rent, the actual owners are responsible for major repairs in the event of sudden damage, but they don’t cover liability or possessions, so this insurance gives renters more peace of mind.

Condo Insurance: HO-6

Nobody wants insurance redundancy. You don’t want to pay twice for coverage if you don’t have to.

That’s why HO-6 insurance is available for condo owners. This form of insurance covers liability, belongings and possibly interior elements like floors and walls.

You typically get the incidental coverage offered by an HO-3, but because your homeowner’s association policy typically covers the rest of the structure, an HO-6 lets you only get the level of protection you need.

Older Home: HO-8

Older homes are like older bodies. Over time, they face many unexpected issues that a newer home rarely faces.

That’s where the HO-8 insurance comes in. Unlike other insurance plans, this is designed specifically to protect older homes. This kind of insurance is like the HO-3, but the HO-8 offers special protections that older homes may particularly need.

This policy protects many historical buildings. If you live in an older home, it’s in your best interest to check this out!

Mobile Home: HO-7

All of the policies listed so far have been designed for standing structures such as single-family homes and condos. However, there is a type of home we haven’t addressed yet: the mobile home.

The best form of insurance for mobile homeowners is HO-7. Similar to the HO-8, it is another modified HO-3 policy. As you’d expect, the standard HO-3 offers all the protections you need, but it also includes special coverage intended to protect mobile homes from the unique threats they encounter.

Optional Insurance

All the forms of insurance we have listed are the most basic ones available. You have probably noticed that all of them have at least some limitations in what they cover.

This is where optional insurance comes in. Do you live in an area prone to flooding or earthquakes? Your insurance won’t cover these things, but you can take out an optional policy that does. Obviously, extra policies add to your overall expenses. Therefore, it’s important to check out resources like FEMA flood charts and determine how likely you are to need coverage such as flood insurance.

Types of Homeowners Insurance: The Bottom Line

Now you know about the different types of homeowners insurance, but do you know how to find the affordable and comprehensive coverage you need?

We specialize in insuring individuals and businesses against just about every kind of threat. To see how we can protect your home, contact us today!