The most basic house insurance coverage is known as HO-1. This protects your dwelling place and personal property from lightning and fire, wind storms, large hail, from airplanes, vandalism, and civil commotion.

The second level of house insurance coverage is know as HO-2. This particular type of house insurance covers basically everything that HO-1 covers. It then goes on to additionally covers any type of falling object that might damage your house. It also covers damage caused by ice and snow, building collapse, sleet, overflow of water, damage caused by water heaters, air conditioning and heating, as well as accidental damage done by electrical currents.

The third type of house insurance is HO-3. This policy is pretty similar to HO-2 with the addition of protecting against liability from any visitors who may get injured on your property. This is the most common insurance policy that individuals purchase for their homes.

HO-4 is the next type of house insurance policy. This type of policy is usually known as renter’s insurance. It’s a policy specifically made for individuals who do not own the property they are getting protected.

These are just a few of the different types of house insurance policies that are available for you to choose when insuring your home. Keep in mind that if you are thinking of buying a home, you will definitely need to have home owner’s insurance before you will be approved by most lenders for a loan.

Two Types of Coverage

A house insurance policy will either give you coverage for the actual value, or for the replacement value. Actual value includes depreciation, which means that an older house may only get 50% (or less) of the current value. This type of house insurance policy could leave you without a house because there may not be enough cash to rebuild.

Replacement value, on the other hand, will give you a house of equal value – in modern materials. This is the more expensive of the two types of policies.

Coverage for Events

House insurance policies carefully state what they will cover. You need to know that if it is not listed in your policy, then you are not covered for it. Most policies will cover you for natural events like fire, tornado, lightning, hail, and a few others. You can be sure that you are not covered for flood damage or earthquakes – these will need to be purchased separately.

There are other things that can bring a lot of damage to your home, too, and you will need to find out if it is covered. This could include things like vehicle damage, snow, plumbing problems, smoke, falling objects (think trees) and more.

Liability

You never know when someone could fall on your property. Of course, this could result in a lawsuit. You need to be covered – just in case.

Contents of Your Home

You have a lot of personal property in your home that you will need to have covered, too. A house insurance policy, however, will only pay for items that are listed – and only about 50% of the value. Special items of greater value (art, jewelry, collections, etc.) will require special coverage. One of the best ways to show your personal property value is to make a walk-through video showing your possessions and talking about them and their value.

Things Not Covered

As you shop around for a house insurance policy, you need to know what things are not covered. You do not want to assume, for instance, that your home business equipment is covered. While it may cover a couple thousand dollars worth, you will need to know for sure.

A sewage backup will also probably not be covered, nor will large boats or car parts. Hail damage is another thing that your house insurance policy probably will not cover, either.

Living Expenses

If there should be a fire or some other reason that you cannot live in your home, this part of your house insurance will provide you with a hotel and food while it is being rebuilt. You also can receive rent money if you had a renter living there as well.

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.