Types of Home Insurance

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Policy Identifiers Based on Your Home Structure Type and Location

Depending on the type of housing structure type and location, the type of home insurance you need will differ. State and local regulations also come into play. Home insurance, generally covers the cost of the home amount you insure, regardless of ownership of the contents inside the home.

Home insurance companies usually have standard types of coverage that they organize into policy types. This is categorized according to the types of disasters and the type of 'dwelling' in which you live. These categories are known as policy identifiers, and can be disclosed to you by your agent or broker:

• HO-1: This home insurance policy specifies certain "perils" (industry-speak for damage or disasters that happen to your home), and will carry limited coverage. It also only covers a limited number of disasters over the course of the policy. It is not recommended to obtain this policy, and it has even been phased out in many states.

• HO-2: This home insurance policy also specifies certain perils (usually covering the 16 most common perils), and coverage levels are typically more generous. This version of home insurance policy can even be purchased for a mobile home.

• HO-3: This covers all perils on building structures, but only specified perils on in-house contents. You are covered for any and all perils unless specifically noted by the home insurance policy. The perils excluded usually include flood, earthquake, war and nuclear accidents (which are all special perils requiring separate endorsements and higher premiums).

• HO-4: This covers the contents of a dwelling for those who are renting or leasing a building, but doesn't cover the building or structure of the unit. It will have limited liability coverage included.

• HO-6: This home insurance policy covers a condominium or unit owner, including contents and "loss of use" of the condo unit. The home insurance policy will also include liability. This is different because there isn't land involved and the home is part of a larger structure.

• HO-8: These kinds of home insurance policies are typically issued for older homes. The insurer reimburses you for damage on an actual cash value basis. In plain terms, this means replacement cost minus depreciation. Beware; since you will not be paid full replacement cost, it could be expensive to take the money out -of-pocket for building or repairing your home to the original state. Full replacement cost home insurance policies are sometimes difficult to obtain for older homes, but check to see if it's available.

You will need various forms of information to obtain your home insurance needs, including the type of home you have, your budget, your tolerance for risk, and "perils".