Comparing All the Best Home Insurance Policies
Did you know that there are many different types of home insurance policies available in the United States? Many people are actually unaware that they have options when it comes to what type of home insurance to use. Today, there are home insurance policies for the budget-conscious, and policies for the coverage-conscious. Whether you are the former, the latter, or somewhere in between, there’s most likely a home insurance policy available that’s right for you.
The HO1 is the most basic
IF you are looking for cheap home insurance and are not concerned with coverage, you need to look no further than the HO1 insurance policy. The HO1 only covers 10 perils, and often times it covers those perils with actual cash value. What does this mean to the insured? It means if a claim is filed, there is a good chance the insured is going to pay much more than just the deductible to rectify the situation. The perils insured with the HO1 are:
- Fire/Lightning
- Windstorm/Hail
- Explosion
- Riot/Civil Commotion
- Aircraft
- Vehicles
- Smoke
- Vandalism/Malicious Mischief
- Theft
- Volcanic Eruption
The HO2 is an average policy
The HO2 insurance policy is the most middle-of-the-road policy. It isn’t the greatest coverage, but it certainly is much better than the HO1. The HO2 will insure 16 perils, and will cover them with replacement cost. Replacement cost is much better than actual cash value, and is an important element for people who are looking to pay out as little as possible in a claim situation. In addition to the ten perils covered above, the HO2 also covers:
- Falling Objects
- Weight of Ice, Snow, Sleet
- Accidental Discharge of Water or Stream
- Sudden & Accidental Tearing Apart
- Freezing
- Damage from Artificially Generated Electric Current
The HO3 is the most common
The HO3 insurance policy is the most common insurance policy in the United States; it’s purchased more than any other policy. Perhaps a reason for this is that the HO3 does its best to combine an inexpensive price with extensive coverage. The HO3 protects your home from far more perils than the HO2 insurance policy. Rather than list the perils covered, the HO3 just has a small exclusion list. That list includes:
- Earth Quake
- Ordinance or Law
- Nuclear Hazard
- War
- Government Action
- Mechanical Breakdown
Each HO3 may have slightly different exclusions, so check with your policy to get a full list of all exclusions.
The HO5 is the best policy
Finally, the HO5 insurance policy is the best insurance policy available. It trumps the coverage of the HO3 policy by providing better protection for the personal property portion of the policy. It usually also comes with additional endorsements that the HO3 policy doesn’t. The HO5 offers roughly the same protection as the HO3 on the home, but also provides open peril coverage to personal property. It is the most expensive and most extensive home insurance policy.
As you can see, whether you’re a budget shopper or a coverage shopper, there’s a policy available for you. The above information should give you a preliminary idea about what type of policy fits your basic needs.