YOU ASK:

What types of homeowners policies are there?

WE ANSWER:

There are six major types of homeowners policies available from private insurance providers, varying in their scope of covering different causes-of-loss. Some of them are basic and therefore, restrictive, while others provide protection against - more or less - any peril under the Sun.

Naturally, you can expect to pay lower premiums for the more basic policies, and broad home insurance policies are expensive in comparison.

Six Forms of Homeowners Policies

  • HO-2 (broad form) provides protection to the home owner's dwelling, personal property and other structures on the premises on a named-peril basis. The causes-of-loss covered under Homeowners 2 policies are specified in the insuring agreement and include windstorm, hail, fire, lightning, explosion, smoke, civil commotion, theft, falling objects, etc.
  • HO-3 (special form) is probably the most popular homeowners policy out there because of its good insurance value (relatively broad coverage for an affordable price). Homeowners 3 provides protection to the insured's dwelling and adjacent structures against different hazards which can cause direct physical loss. HO-3 covers all causes-of-loss except the ones specifically excluded in the policy. Personal belongings are insured on a named-peril basis.
  • HO-4 (contents broad form) is specifically designed to insure the personal belongings of tenants, boarders or roomers against damage or loss on a named-peril basis, while at the same time providing personal liability protection. The perils covered under Homeowners 4 are the same as the ones included in HO-2 policies.
  • HO-5 (comprehensive form) provides protection of the insured's dwelling and other structures against any causes-of-loss that can physically damage or destroy the insured's properties, unless they are specifically excluded.
  • HO-6 (unit-owners form) is designed for the owners of cooperative apartments and condominiums. The perils insured against are the same as the ones covered in Homeowners 2. Condo or cooperative apartment owners must purchase a minimum coverage of $5,000 on specific unit property, such as carpets, wallpaper, etc.
  • HO-8 (modified coverage form) is designed to protect older homes against physical damage, on the basis of the cost of repair, and not of replacement. The coverage Homeowners 8 provides for theft is highly restrictive - the policy pays up to $1,000 per occurrence.
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