Home Insurance Coverage Options

Home insurance coverage isn't just for traditional homeowners. In reality, homeowners insurance coverage is only one type of property insurance. Property insurance policies can also provide coverage to renters and condo dwellers. In general, property insurance protects the possessions stored in your home and, with some policies, the physical structure of your home. We've summarized the various types of property insurance below.

• HO-1: Basic coverage: a homeowners insurance policy that covers basic specified perils in the event of direct damage to the insured property. An HO-1 policy also typically provides personal liability and medical payments coverage. In most states, this form of home insurance coverage has been discontinued because homeowners prefer broader coverage.
• HO-2: Broad coverage: this home insurance policy insures the policyholder's dwelling, structures connected to the insured dwelling, and personal belongings stored on and off the property. HO-2 policies also provide reimbursement for loss of use, meaning the policy covers living expenses while the home is repaired. The list of perils covered by an HO-2 policy is more extensive than that of an HO-1 policy.
• HO-3: Special form: the most common type of home insurance coverage, HO-3 policies protect the dwelling, related structures, personal property, and loss of use. Liability coverage and medical payments coverage are also included with this coverage. This coverage protects homeowners from a long list of named perils.
• HO-4: Renter's policy: also known as renters insurance coverage, an HO-4 policy protects tenants from direct damage to unscheduled personal belongings on a named-perils basis. Personal liability and medical payments coverage are also included with renters insurance coverage options.
• HO-6: Condominium policy: this policy is intended to coordinate with the policy purchased by the condo association that covers the physical structure and common areas of the community. An HO-6 policy insures condo owners for direct damage to their personal property on a named-perils basis. A condo insurance policy also provides personal liability and medical payments protection.
• HO-8: Older home: HO-8, or modified home insurance coverage, offers traditional named-perils coverage for damage to property in addition to personal liability and medical payments coverage. This type of homeowners insurance coverage is similar to HO-1, but it allows the insured to change the replacement cost provision to a repair-cost basis. In some cases, the replacement cost option can also be converted to an actual cash value basis. HO-8 home insurance is ideal for older homes or homes that would not be replaced if they were destroyed.