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Empower Yourself By Understanding What Type Of Homeowner’s Insurance You Have

When most people discuss homeowner’s insurance with their insurance agent, they discuss what level of coverage they want and how different factors ultimately influence their premium.

However, did you know that there are actually different levels of homeowner’s insurance? Understand the types of homeowner’s insurance you can purchase and how your insurance is actually classified can help you better understand your coverage and negotiate your rates.

HO Designation

To start with, each type of homeowner’s insurance is designated with the abbreviation of HO followed by a number. Your insurance agent uses that information to identify the type of policy that you have. The dollar amount you are covered by varies depending on what you choose and pay for all of the types of insurance listed below.


HO-1 insurance is generally referred to as basic homeowners insurance. It covers your house and your personal property against the usual suspects: theft, vandalism, malicious mischief, fire, lightening and windstorms.


HO-2 insurance is also referred to as basic homeowners insurance. However, it covers more than HO-1 insurance does. It includes everything that HO-1 insurance does plus some extras. It covers damage caused by electrical surges and falling objects. It also covers water damage that was a result of heavy ice or snow on your roof as well as damages caused by your utilities or appliances. If you have basic insurance, make sure you clarify what that really means.


HO-3 insurance is generally called special or extended homeowners insurance by insurance agents. HO-3 policies are generally the most comprehensive policies that one can purchase for their home. They cover everything that HO-1 and HO-2 polices cover, plus a lot more. They provide coverage as well for damage caused by: hail, explosions, riots, civil commotion, aircraft, vehicles, smoke, volcanic eruptions and freezing. You may have heard this called the All-Risk Policy.


HO-4 homeowners insurance is actually rental insurance. It covers most of the incidents that the first three insurance types cover. However, the coverage only applies to personal property since the renter is not in charge of insuring the physical structure they live in.


HO-3 may be called the all-risk policy, but HO-5 really is the all risk policy. It covers more causes of damage and also offers more in-depth liability coverage. It will cover pretty much anything that could happen to a home. If you really don’t want to ever pay any out of pocket costs, this is the way to go.


HO-6 insurance coverage is designed for condominium owners and covers the owner’s personal property and well as building items that one actually owns.


HO-8 is a relatively uncommon type of insurance. It is more commonly known as Basic Older Home Coverage, and covers historical and other older houses.

If you own a regular house, you most likely have HO-1, HO-2, HO-3 or HO-5 insurance. As the numbers increase, so does what you are covered for. The next time you talk to your insurance agent, find out what type of home insurance you really have. 

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