Choosing the Right Home Insurance Policy for Your Personal Situation
Choosing the right policy from among the different types of home insurance can be challenging. Knowing what your options are is an essential first step.
Different Types of Home Insurance
There are several different types of home and property insurance policies. Understanding the differences can help you find a suitable home insurance policy when shopping for a policy.
Special Form Policy
The most common type of home insurance on the market is the special form, or HO-3, policy. These home policies cover your house at full replacement cost. They also provide additional structures and personal property coverage, usually at actual cost value. You may be able to customize your policy or add additional coverage for personal property if needed.
HO-3 policies cover all risks unless they are expressly listed as exceptions. Some standard exclusions include the following:
- Water damage resulting from flooding or sewage backup
- Power failures
- Earthquakes
- Mold or rot
- Foundation problems
There may be additional exclusions, so it is always a good idea to read your entire policy and take any questions to your agent.
Comprehensive Form Policy
As its name implies, this type of policy, the HO-5, is slightly more comprehensive than the standard form. It provides at-risk coverage for your home and personal property. Replacement values are usually based on the full cost of replacement and not actual cash value.
Contents Broad Form Policy
This form, also called the HO-4, is more commonly known as renters’ insurance. It provides coverage for your personal property. Some policies also extend liability coverage if someone is injured in your rental. These can often be confusing, but we’re here to help! Call us with any questions!
