Types of homeowners insurance:

By RealtyCrunch IncMay, 1st 2020
Types of homeowners insurance:

There are several types of homeowners insurance that you can purchase. Policies can vary in terms of the coverage, so it’s definitely important to know the difference between them. Below we’ve listed some of the most common types for homeowners:

HO-3 is a type of insurance that is most common among homebuyers. Lenders typically require at least this level of coverage when providing you a mortgage. The policy typically covers damages from:

  • Fire or lightning
  • Smoke
  • Windstorms and hail
  • Explosions
  • Riots
  • Damage from aircraft
  • Damage caused by vehicles
  • Vandalism
  • Theft
  • Volcanic eruptions
  • Falling objects
  • Weight of ice, snow and sleet
  • Water overflow or discharge from household systems like plumbing, air conditioning and appliances
  • Freezing of those same household systems
  • Sudden damage from a power surge
  • Sudden tearing, cracking or bulging of a hot water system, steam system, air conditioning or fire protective system

HO-5 is the most extensive homeowner coverage that pays for all causes except those the policy excludes by name. It’s typically available only for well-maintained homes in low-risk areas, and not all insurers offer it.

HO-1 AND HO-2 is a less popular homeowner insurance among buyers which pays out only for damages caused by issues listed in the policy.

What’s not covered by homeowners insurance

Policies typically exclude damages from other causes. Below you’ll see some of the reasons why your home insurance won’t be applicable:

  • Flooding, including drain and sewer backup.
  • Earthquakes, landslides and sinkholes.
  • Infestations by birds, vermin, fungus or mold.
  • Wear and tear or neglect.
  • Nuclear hazard.
  • Government action, including war.
  • Power failure.

That being said, you can buy separate coverage for some of these risks. We recommend you talk to your insurer to add additional coverage (endorsements)  to your policy. These will usually cost extra but provide you with more protection.