Six basic types of homeowners insurance

    Once you have purchased your dream home, it’s time to protect it! Buying a home can be very risky without homeowners insurance. It is essential for safeguarding your most valuable possessions against defects, vandalism and disaster. It will cover the costs of repairs in the event of calamities such as fire, storms, vehicles, aircraft, riots, theft, and faulty household systems or appliances. It’s important to find out what types of insurance you need after buying a home.

    There are six basic types:

    1. HO-2, the least expensive type, covers only named perils such as fires or lightning. If the peril is not named, it’s not covered.
    2. HO-3, generally recommended as the minimum coverage, includes open perils protection. It covers all direct physical losses with certain exceptions such as earthquakes, floods, and intentional loss.
    3. HO-4, renters and tenants insurance, covers personal property rather than the structure itself. There are also exclusions for which types of perils are covered.
    4. HO-5 covers open perils and adds a rider, which includes protection of personal property. Exceptions also apply.
    5. HO-6 is for condos or co-ops. It is similar to HO-4, but also covers improvements you may have made to the dwelling.
    6. HO-8 is for older homes. It insures the home for the repair cost or market value instead of the cost to replace it.

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