Home Insurance Types in US

Home insurance or the house owners insurance is the private home cover policies which keeps you tension free in any cases of damage at your property or to any of your belongings. These policies may cover the entire damage caused at the house and to the house or may insure only certain things or articles partially paying a percentage of the money in any case of disaster. But the type of coverage and the assured money depend on the policy opted for and the premium paid and the company chosen. The insurance provided for your property and your home may also vary between different states of the United States of America as there is no centralized body controlling the home insurance section in the nation.

Types of Home Insurance in USA

Insurance Services Office (ISO), a private insurance company at New Jersey gave standardized insurance forms to equalize the home insurance types in USA and to avoid confusion between the different plans. These standard policies include:

HO 1: These are the fundamental insurance plans which insures the things that are stated in the plan, it usually insures  against damage by perils like fire, lightning, windstorm and theft, civil commotion, damage from vehicle or aircraft etc. but this insurance does not cover flood and earthquake. It is also called Basic Form Homeowners Policy.

HO 2: This is also called Broad Form homeowners policy and it provides protection against a total of 17 perils which also includes the eleven perils stated in the HO 1. These insurance though referred to as Broad Form Home Owners Policy is not actually broad in its sense, as it does not cover any other perils than the ones stated in the plan.

HO 3: This is the Special Form Home owner Policy and is the most commonly purchased ones for single family home of the United States. This policy protects home structure and covers any accident or injury that may occur inside the house or property insured. This all risk coverage plan covers every peril that is not specifically excluded (like earthquake and floods) in this home owner's insurance list.

HO 4: This insurance policy is also referred to as Tenants' insurance or Renter’s insurance. This policy does not insure the property but covers the valuable items in the insured house against fire, natural calamities, theft, windstorm, etc, but as in the other forms, this policy also does not provide any protection against loss of valuable articles in the house due to natural calamities like earthquake and flood.

HO 5: This policy is otherwise called the Premier Homeowner Policy and it insures the proper house. This policy does not cover a condominium or apartments and the insurance safety provided is similar to that of policy HO 3. This policy covers almost all perils unless specifically excluded in the policy statement.

HO 6 or the Condominium Policy is for condo owners and the condo units they live in, and it also covers certain perils and factors which are not considered in the home insurance policy.

HO 8 or the Older Home Insurance Policy is a modified coverage form which is meant for older second hand homes. This replacement policy is for old homes whose market value is much below the amount to be spent on its replacement or renovation.

Though most states of the United States of America uses the above mentioned forms, some States of USA uses the term HO A, HO B, HO C etc instead of the name HO 1 and HO 2 which are most commonly used.

How to choose your policy

You should be choosing the policy for your house and property based on what type of protection you would like to avail, there are some policies like the HO 6 which are specially designed for some type of house (in this case, the Condominium unit) but most policies like HO 1 and HO 2 are designed to suit all houses and the only difference between these policies is, the perils they cover. So while choosing a policy there are many important things you should be considering.

Decide what you want from your policy by asking yourself what are the main thing that should be protected at your property.

Do you want a complete coverage against maximum number of perils or will a few perils listed on the policy work for your home.

Will they cover the complete damage or will only a certain percentage of the damage caused by the disaster will be paid by the company.

Does the given policy also cover the liability during any mishaps and accidents at your house and inside your property?

Is the premium you pay worth the benefits you and your house will be receiving?