What Are The 5 Basic Coverage Categories Of A Home Insurance Policy?

​Theft, natural catastrophes, and other unforeseen events should be covered by a homeowner's policy. In most plans, you'll find protection for your home's structure, personal possessions, liabilities, and extra living costs as standard features. 

As a result, homeowners insurance falls into five distinct types, as shown below.

1. HO-1 
Homeowners' insurance plans classified as HO-1 are the most basic. No matter what occurs outside of the specified risks listed in the insurance, HO-1 will not pay for it. 

Only ten risks are covered by the most basic sort of homeowners' insurance: 

• Fire 
• Theft
• Lightning
• Vandalism
• Explosions
• Volcanic eruption
• Hail and windstorms
• Damage from aircraft
• Riots and civil disturbance
• Damage from automobiles

Many house insurers avoid this type of insurance since the premium for more comprehensive policies is just a few dollars more costly.

2. HO-2 
Policies classified as HO-2 cover a wide range of property risks. This sort of house insurance, like HO-1 plans, solely covers the dangers mentioned explicitly in this policy.

In addition to protecting the home's structure, HO-2 plans often provide coverage for the owner's personal property and liabilities. All risks listed in HO-1 are covered by a comprehensive homeowners insurance policy.

This policy also covers the following: 

• Things like furniture that falls  
• Damage caused by an electrical current made by humans
• Home systems like air conditioning and heating that freeze
• Water that leaks or spills out by accident, including from a burst pipe
• Pipes and other home systems that break apart suddenly and by accident

3. HO-3 
HO-3 plans are a sort of house insurance that is quite specific. Generally, HO-3, unlike HO-1 and HO-2, is an open-peril policy. The insurance may cover any form of risk, even if it hasn't been expressly stated.

Structures linked to the house, such as a garage, are often covered by this coverage. If an individual is hurt on the protected property, the insurance should also cover their personal property and legal liabilities.

It's important to know that insurers often leave earthquakes and floods out of HO-3 plans and instead sell separate policies to cover such events. 

4. HO-5 
HO-5 plans are a sort of house insurance that covers a wide range of risks. Homeowners' comprehensive insurance, the same as HO-3, is an open-peril policy covering everything that isn't explicitly excluded. Although the coverage offered by HO-5 and HO-3 is almost identical, there are some crucial variances between the two policies.

Additionally, HO-5 covers personal possessions and the home's structure regarding open-peril coverage. Replacement costs are paid by HO-5 once a claim is filed. In addition, higher amounts of coverage for valuables like jewels may also be found in an HO-5 insurance policy.

5. HO-8 
HO-8 insurance covers older homes (at least 40 years). Therefore, this kind of home insurance is used by insurance firms to cover older homes. 

In fact, in the 1980s and 1990s, "named-peril" rules were prevalent. HO-8 insurance protects the following: 

• The home itself
• Owner's personal belongings
• Owner's legal responsibility
• Loss of use

There is no difference between HO-8 and HO-1 threats. Replacement cost coverage under the HO-5 policy is based on standard construction pricing. So, the damaged material may be replaced with a similar item.

Conclusion
Having house insurance safeguards your property in the event of an unforeseen event. And if you want to get a mortgage, it's generally necessary. Without protection, you'll be on the hook if anything happens to your house or possessions.

At McClain Matthews Insurance, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (317) 298-7500 or Click Here to request a free quote. Any coverage discussed is not guaranteed. Contact us today to go over your specific needs and we are happy to help you find a policy that works for you and your budget!