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When you are thinking about insurance to cover your home in the event of an accident or natural disaster, home or house insurance is what you will need. A basic policy will cover loss of your home, your possessions or loss of the use of your home during any type of accident or disaster that may happen.

All policies are long and they spell out in detail what you are paying a premium for and what will be covered. The challenge with policies is that things like earthquakes, floods, “Acts of God”, war (including nuclear explosion) are excluded. This is not easy when you are dealing with a home in some of the areas where these things can occur. However, you can usually get a specialty insurance that protects you from these disasters. As an example, you can usually purchase flood or earthquake insurance in addition to the regular insurance policy.

Types of Homeowners Insurance:
There are generally seven types of homeowners insurance that an individual can purchase based on need. These are:

HO-1 — very limited and covers only certain items that are spelled out in the policy. This will usually be used for coverage of specific valuables inside your home.

HO-2 — this one is similar to HO-1 but it covers specific areas inside a house. It will list specific criteria as what areas would be covered and why.

HO-3 — most people have this insurance because it is geared to cover the entire house. It will cover anything that deals with the individuals who come into the home, visitors to the home, or even the structure of the home. This is sometimes called an “all risk” policy.

HO-4 — this is for renters and it covers specific aspects of the apartment. If it is in a complex, it will cover the aspects that a blanket policy for the entire complex does not cover. It can also cover injuries or liabilities for guests if necessary. Usually these cover you in the event of damage from lightening, a riot, falling objects, snow, sleet and other natural disasters.

HO-5 — covers a home only and is not relevant to a condo or apartment. This only insures the possessions in the home and liability from visitors or people passing by. It covers a wider amount of things than the HO-3, but it is similar.

HO-6 — this is specifically for condo owners and covers the aspects of the individual’s particular condo. It will cover what the home owner’s association doesn’t cover. It is a good idea to check with the by-laws of the home owner’s association to see what other aspects you need to cover.

HO-8 — usually reserved for people with older homes, it will insure them at a lower market value rate because they may need to do more costly repairs.

It is always a good idea to check with an insurance agent and discuss your particular situation to see what type of insurance you need.

You will usually pay your home insurance for a fixed number of years over time. Usually this comes in a monthly or quarterly premium and sometimes people pay this yearly. It will depend on the type of arrangements you make with your insurance carrier. When you purchase a home through a mortgage company, they will make it mandatory for you to insure the home so if it is destroyed the bank is protected.

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