If you are considering purchasing a homeowner insurance policy, you must consider several factors before signing that contract. This is important because this policy can protect you in cases of disasters and even day-to-day damages that your house will sustain. Snow and sleet can damage your roof. You pets can pee on your valuable rug. And storms can break your windows or even destroy your home.

A homeowner insurance policy should still be considered a priority even with the falling real estate prices in the US. If you choose a good insurance policy, it can entitle you a stable value for your home even when the market value substantially decreases. When choosing a policy, consider your budget, your needs as well as certain factors that will make the homeowner insurance policy beneficial to you and your home.

Standard Homeowner Insurance (HO) Policies

1. Ho-1

This type of policy is a limited policy that only covers basic items in your home. It also limits coverage only on the items listed in the contract. It can cover a valuable personal property inside your home. This type of policy has slowly been phased out in most states.

2. HO-2

This has a slightly wider coverage than the Ho-1 and covers personal belongings as well as parts of the house that can be damaged. There is what is called ìnamed perilsî which are specifically listed in the homeowner insurance policy contract. Exceptions are also delineated so it’s best to read the contract carefully before signing.

3. HO-3

This is a comprehensive type of policy which covers not only personal belongings and portions of the house but it includes exigencies such as damage caused by pets and visitors. It includes the structure of the house and wear and tear attributed from daily use. There is an ìopen perilsî clause that entitles the insurer protection against other kinds of damages. Premium for this is relatively more expensive that the other two but this can adequately protect you in case of need.

4. HO-4

This type of coverage is generally much broader covering damages made not only by pets and visitors but passers-by as well. Called the renter’s insurance policy, it covers damages sustained to the rented home, condominium or apartment as well as the belongings within. This has the highest coverage compared to the first three policies.

5. HO-5

This is basically the same as the HO-4 but this homeowner insurance policy is applicable to homes and not to rented homes, condominiums or apartments.

6. HO-6

Specifically designed for condominium owners, it covers the area owned by the insurer in the building. The insurance covers liability for the insurer and their guests.

7. HO-8

This entitles the owners insurance against depreciation of the market value of the home.