Homeowners Insurance Types (Policy Forms)

Single-Family House Insurance Policies

The detached single-family house is the most popular type of dwelling unit in the United States, and it can be insured under one of five distinct policy forms. Keep in mind that coverage might differ from state to state, even within the same form.

HO-1- plans provide the most restrictive homeowners insurance coverage, with coverage confined to a particular list of 11 listed dangers. Fire and lightning; windstorms and hail; explosion; riots and civil disturbance; airplanes; automobiles; smoke; vandalism and malicious mischief; theft; glass that is part of the home; and volcanic eruptions are the most prevalent risks covered by an HO-1 form.

It does not cover any nameless risks; only those that are specified are covered. Personal possessions in the house are not always covered by HO-1 insurance. In most states, HO-1 insurance is no longer available.

HO-2- insurance cover everything in the HO-1 policy plus two additional perils: damage from falling items and water damage from an unintentional overflow of plumbing; heating, ventilation, and air conditioning (HVAC); and home appliances. The HO-2, like the HO-1, is specified hazard insurance that covers just the risks expressly stated – no others. Personal property in the residence is likewise covered by the HO-2.

Because of their extensive range of coverage, HO-3 plans are the most frequent. The HO-3, often known as an extended or special homeowners’ insurance policy form, covers practically every risk except those expressly excluded (such as earthquake, flood, landslide or mudslide, nuclear accident, and sinkhole).

HO-3 - insurance, on the other hand, exclusively cover personal things in the house against the stated risks listed in the policy.

Keep in mind that water damage from overflowing plumbing, HVAC, or domestic appliances is not the same as flood damage. Flooding is distinct from water damage caused by overflow and necessitates flood insurance.

HO-5 - policy forms are similar to HO-3 policies in that they cover practically every risk that isn't expressly excluded. The HO-5, on the other hand, is more extensive than the HO-3 and protects personal property for practically every risk, unless the item is expressly excluded. Because of the breadth of the coverage, this insurance is more expensive than others.

HO-8- An HO-8 policy form is intended for older properties with a replacement cost that exceeds the home's real cash worth. As a result, the HO-8 insurance type is widely used to ensure aesthetically significant structures and recognized landmarks.

In this situation, if there is a loss, the payoff of the real cash value would be substantially lower than the pay-out of the replacement cost. Because of the lower payment, HO-8 insurance is more inexpensive. The homes are often more than 40 years old and do not qualify for HO-3 coverage. The HO-8, like the HO-1, only addresses the 11 most prevalent dangers.

Insurance Options For Condominiums And Co-Ops

HO-6 - HO-6 policies are intended for condo owners and co-op renters. Each condominium or co-op association has its own insurance coverage and levels of protection. As a condo owner or co-op renter, you have the right to check the association's insurance policy. Before getting insurance for your unit, make sure you read the policy thoroughly. You don't want to buy too little coverage or have coverages that overlap.

Condo owners require HO-6 insurance to cover the sections of the building that they own, namely the walls of their unit and everything contained therein. A condo association is sometimes just responsible for the building's common areas, landscaping, and the bare walls, floor, and ceiling. In that case, an HO-6 policy is very crucial.

Insuring a co-op is a little more complicated. Co-op renters do not own their individual units; instead, they own a portion of the entire building. Despite the fact that co-op owners are technically tenants, they require HO-6 insurance rather than renters’ insurance due to their own position. Co-op organizations, like condo associations, may have restricted coverage.

Forms For Tenants' Policies

HO-4- Also known as "renters’ insurance," this policy form protects the personal property in a rented house or flat. The landlord's insurance protects the rental building in the case of any of the 11 risks covered by an HO-1, but not the tenant's goods. As a result, tenants must get an HO-4 insurance form to cover personal property as well as any portion of the flat that they may own. For instance, if a policyholder installs a new kitchen cabinet, the cabinets are protected as their assets.

The HO-4 insurance type additionally includes coverage for additional living expenses if the home becomes unliveable as a result of a covered danger. Unlike other insurance firms, HO-4 does not necessarily contain liability coverage, which may and should be added to the policy for a fee. Liability coverage is an important component of homeowners' and renters’ insurance since it protects the insured from potentially devastating financial constraints.

Other Types Of Policies

Insurance for homeowners’ associations (HOAs): This insurance policy form is intended to protect the common property of complexes where renters own their units in one or more buildings. Because each homeowner’s association's demands are unique, these regulations might vary substantially.

They all have some mix of business property insurance coverage against dangers, liability coverage for accidents, mistakes, and injuries on shared property, and business crime insurance in the case of vandalism, robbery, or board member dishonesty.

MHP forms safeguard mobile homes (also known as manufactured houses) and any buildings that are linked to them. The insurance can cover the same 11 risks as an HO-1 or as many as the HO-3 type described above. Mobile home coverage is only available when the home is stationary and not when it is in transit.

RV insurance and mobile home insurance are not the same thing. Because mobile homes are immobile, their insurance is more similar to other forms of homeowners insurance. You may declare and insure an RV as your principal residence, but because it can be driven and parked, RV insurance is more similar to vehicle insurance.

DF-1 - If your house does not qualify for one of the above-mentioned homeowner’s insurance policy types, you can still cover it. If your house does not qualify for other policy types, some firms sell a DF-1 (also known as fire and extended coverage) policy form, which provides extremely limited coverage. Fire and lightning; windstorm and hail; explosion; riot or civil unrest; aircraft; automobiles; and smoke are often covered under the DF-1 insurance form. However, check your insurer's policy because only precisely listed risks are covered.