Home Insurance - Types

A home insurance is basically a type of property insurance that not only offers coverage for the building or the main structure but also the valuable contents inside it. Thus, while a building insurance will protect you against any kind of monetary loss due to damage or destruction of the actual structure or permanent fixtures of your home, contents insurance will reimburse the replacement cost of all the insured items if they are stolen or damaged. Since there are so many types of home insurance policy available in the market, each providing different levels of cover for both building and contents, your selection of the same should be based on a sound knowledge of your specific requirements.

When selecting a home insurance policy make sure that it provides you cover for the entire cost of rebuilding your home. Thus, an insurance that offers a cover of up to the current market value of your home will not provide you complete protection. Also, it is best not insure the land on which your house is built as it is unlikely to suffer much damage due to fire or storm. As for contents insurance, make sure that you do not underinsure or over insure the same as in both cases you will end up paying more from your own pocket,. While in the first case you will have to pay for replacing those contents, in the second case you will end up paying much higher premium. Once you have figured out your home insurance needs, you can opt for any of the following type as per your requirements.

HO-1: This offers basic coverage against loss or damage caused due to fire or lightening.

HO-2: Also known as "broad coverage", this type of home insurance covers loss or damage to property due to hail or windstorm, burglary, explosion, smoke damage from vehicles and aircraft and glass breakage. This insurance also covers the cost of rebuilding the home and replacing its contents that have been destroyed due to fire, vandalism, malicious mischief, and riot or civil commotion. If you have this insurance, you can also file a claim in case of building collapse, replacement of plumbing due to freezing or over heating, damage caused to the property due to falling objects and weight of snow, ice, or sleet.

HO-3: This is the most widely purchased home insurance policy that provides coverage for your home and detached structures against loss or damage from any peril except for those specifically excluded in the policy. Make sure that you read its fine print carefully before purchasing this policy.

HO-4: This is a renter's policy in which only the household contents and personal belongings are insured against the perils mentioned in the HO-2 policy. However, you can also opt for coverage of the additional living expenses, medical expenses and liability protection in this policy.

HO-6: This type of home insurance is ideal for a condominium unit-owner who wants to insure items not insured by the association policy.

HO-8: Commonly known as the "older home" policy, this type of home insurance is best suited for those living in old homes.