Homeowners insurance is designed to cover against 16 different types of
disasters that could affect your property. These disasters include fire
or lightning, windstorm, explosion, riots, aircraft damage, vehicle
damage, smoke, vandalism, theft, volcanic eruption, falling objects,
weight of snow, ice, and sleet, overflow of water from pipes or related
ducting, sudden destruction of heating/cooling systems, frozen pipes or
related and damage from electrical current. Types of disasters not
covered by homeowners insurance include floods, earthquakes and
maintenance damage.
There are different types of homeowners insurance policies for those
who own their home, who rent their home and who own a co-op or condo.
If you own the home you live in, you can choose from the following policies:
HO-1: Limited Coverage Policy, which covers you against the first ten
disasters mentioned above, but is no longer available in most of the
United States;
HO-2: Basic Policy, which protects againsts all 16 disasters and has a version applicable for mobile homes;
HO-3: The Most Popular Policy, which protects a home from all perils unless excluded;
HO-8: Older Homes, which is designed for older homes and reimburses on
a cash value basis equal to replacement cost less depreciation.
If you rent the home you live in, the following policy is available:
HO-4: Renter, which protects the different parts of your apartment and
possessions within the apartment from the 16 disasters mentioned above.
If you own a co-op or condo, the following policy is available:
HO-6: Condo/Co-op, which offers coverage for structural parts of and possessions within the condo or co-op you own.
When purchasing homeowners insurance, it should be remembered that
prices can vary from provider to provider. It is, therefore, important
to get no fewer than three different price quotes via phone or Internet
from providers. When considering an insurance company, remember to
check independent rating agencies and any applicable consumer magazines.
With the above in mind, do not consider price alone. Customer service
and efficiency are also very important factors. Get in touch with your
state insurance department so it can provide you with consumer
complaint ratios by company.
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