The Different Levels of Homeowner’s Insurance: What You Need to Know

Most standard homeowner’s insurance policies cover damage to your home for theft, fire, lighting, smoke, frozen pipes, ice or certain types of weather damage. It usually covers you up to a certain dollar amount if someone is injured on your property and decides to sue you.

But, did you know that there are many “levels” and “types” of homeowners insurance? Here are your options:

HO1

It’s the most basic with limited coverage. It’s also the cheapest, but if you have a mortgage, most mortgage companies won’t accept the limited coverage because it hardly covers anything.

HO2

Has a lot more coverage than HO1, but still limited reimbursement if you experience a loss.

HO3

This is the most popular with almost 80% of the homeowners’ policies sold today. This option covers “all perils and all risks” except those that are “excluded” in the addendum.

HO4

This is a “renter’s” policy and it protects the possessions of tenants living in the home against loss. It usually includes medical and liability coverage for the renter. So if you own a rental property, you may want to advise your tenants about this option.

HO6

This policy is for those who live in condos. It not only provides for personal property, liability and medical expenses, it covers the inside walls of your unit—which you own.

HO8

This is for older homes and is similar to HO1. The difference is that it will reimburse the actual cash value of the home.

Shopping for insurance? Contact one of our Loan Officers for helpful information including some local, trusted insurance professionals!