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Home Insurance

If you are a homeowner you will definitely want to have home insurance. This article describes what home insurance is and why it is vital you have some form of protection for your home.

What Is Home Insurance?

Home insurance is also commonly called homeowners insurance (often abbreviated as HOI). This is the type of insurance that covers private homes. It is an insurance policy that actually combines different personal insurance protections. It includes losses that occur in a home, its contents, loss of its use or loss of other possessions. The same is true with liability insurance for accidents that may happen at home or in the hands of the homeowner within the policy territory. It also requires that at least one of the insured names lives in the home.

It is a multiple-line insurance which means that it includes both property and liability coverage. It has a single premium that is paid for all risks.

The cost of homeowners insurance depends on the amount to replace the house and additional items to be insured—is attached to the policy. The insurance policy itself is a long contract, and states names that will and will not be paid in the case of various events. Typically, claims due to floods or war and termites are excluded. Special insurance can be bought for these possibilities, including flood insurance. Insurance must be adjusted to reflect replacement cost, particularly upon application of inflation or a cost index.

The home insurance policy is generally a term contract—a contract that takes effect for a fixed period of time. The payment the insured makes to the insurance provider is called the premium. The insured must pay the insurer the premium every term. Most insurance providers charge a lower premium if it appears less likely the home will be destroyed or damaged: for example, if the house is situated near a fire station; if the house is equipped with fire alarms and fire sprinklers; or if the house exhibits wind mitigation measures, like hurricane shutters.

Types of Home Insurance Policy

Currently, the ISO has 7 standardized homeowners insurance forms in general use:

HO1 – Basic Form Homeowner Policy to cover perils such as the following: damage acquired from vehicles and aircrafts; fire and / or lightning; malicious mischief and / or vandalisms; hail and / or windstorms; riot and/ or civil commotions; eruptions
glass breakage; and personal liability. This tupe of home insurance does not cover floods and earthquakes.

HO2 – Broad Form Homeowner Policy is a more advanced form of home insurance that provides coverage on a home against 17 listed perils (including all those insured by HO1).

HO3 – Special Form Homeowner Policy, which is the most typical and comprehensive home insurance that is used for single-family homes. The HO3 home insurance policy provides “all risk” coverage on the home with some excluded, such as earthquake and flood.

HO4 – Renter’s Insurance for those who rent a property. HO4 home insurance covers personal property as well as the contents portion of the HO2 and HO3.

HO5 – Premier Homeowner Policy, which covers the same as HO3 home insurance along with more.

HO6 – Condominium Policy is a home insurance plan for those who own a condiminium.

HO8 – Older Houses home insurance.

If you are looking for home insurance make sure you are properly covered for everything you hold dear or anything of any value. Damage to your home or the possessions therin is never easy to take. It is even more painful to take if your home cover is insufficient and you end up with no home insurance payout to cover your losses.