Homeowners Insurance Types for Condos, Standalone Homes, and Rented Apartments

Do you know how many types of home insurance policies are there? 8! Not to mention the ones for condos and rented apartments. A common problem homeowners often face is that they can’t seem to decide which policy to opt for. Most people have one thing in mind when it comes to purchasing insurance: protection against disasters.

Let’s assume that your suburb was just hit by a natural disaster and you are trying to file an insurance claim. In another case, you were just robbed off your valuable jewels and are now filing a claim. You are informed by the insurance agent that neither of the disasters is covered under your insurance.

Each home insurance policy covers certain disasters, which is why before buying one, you need to know what it offers. The more coverage you need, the more you will have to pay for it.

Standalone Homes

 

HO-1

This home insurance policy offers limited coverage. It protects you against 11 specific perils including:

1. Windstorms and hail
2. Fire and lightning
3. Civil commotion and riots
4. Mischief
5. Explosions
6. Vehicles
7. Smoke
8. Aircraft
9. Malicious mischief and vandalism
10. Theft
11. Volcanic eruptions

If you are looking for home insurance against disasters that are termed as an Act of God, then HO-1 is the best policy for you. Remember, this policy does not cover expensive personal belongings. If you’re interested in getting your personal belongings covered check out this article!

 

HO-2

HO-2 covers the 11 perils mentioned above and some others. The additional perils include:

• Damaged caused by falling objects
• Water damage (caused by plumbing problems)
• Damage from household appliances
• Damage from the HVAC system

The good news is that this policy covers you, as well as your house.

 

HO-3

The HO-3 policy is the most common type of home insurance coverage that is chosen by many homeowners. The perils covered under this home insurance policy include the 11 mentioned in HO-1 and a few others. The only difference is that the HO-3 policy also covers personal belongings.

For example, let’s assume that a fire destroyed your house, as well as your belongings. When you will file a claim under your HO-3 policy, you will get coverage for the structure and the belongings inside your house. However, if the damage caused to your property was because of a falling object, the HO-3 policy will not cover this. This policy also excludes any damage caused by a flood. You will need to purchase flood insurance for water damage.

The remaining 5 perils covered under the HO-3 policy include:

• Snow
• Freezing pipes
• Malfunctioning of the HVAC system
• Damage from electrical currents
• Damaged fire sprinkler system

 

HO-4

This policy is similar to the HO-3 policy, but it has a twist. There are 16 perils covered under this policy. Think of it as a customized policy that you can use to your advantage. Since this policy covers more, the cost of purchasing it is too high.

 

HO-8

The HO-8 policy is mostly for architecturally significant structures or registered landmarks. If the house has a replacement cost which exceeds its cash value, then this policy can be purchased. However, the payout offered is much smaller compared to the replacement cost.

 

Rented Homes

 

HO-4

This home insurance protects against disasters and covers the 11 perils of the HO-1 policy. Known as the “renter’s insurance,” this policy covers the tenant’s belongings, which is why it should be bought alongside the HO-1 policy. For example, if you decide to install new cabinets in the kitchen, then these will be covered in your insurance plan.

One of the best things about an HO-4 policy is that it covers additional living expenses, in case the apartment becomes unlivable. Remember, this does not cover liability protection.

 

HO-6

This home insurance policy is specifically designed for condo owners. Here, the dynamics are a little different because the policy is provided by the condo association. You should go through the policy and make sure that the specific condo you are purchasing has adequate coverage. The perils covered under this policy include the condo’s structure, your belongings, additional living expenses, and liability. This is where the difference lies between a condo and a co-op.

A condo insurance policy is provided by the owner.
A co-op insurance policy must be designed by the renter.

Since there are multiple renters, the insurance policy should be based on the stake in ownership. In both insurance policies, the coverage is limited. This is why you have to carefully choose the right condo or co-op.

 

Other Policy Forms

 

HOA (Homeowners Association Insurance)

If you live in an area that is controlled by the Homeowners Association, then you should purchase this policy. It collectively covers the buildings as well as a few other disasters. Depending on the stake the association has in the buildings, the coverage includes accidents, injuries on property, vandalism, and robbery.

 

MHP (Mobile Home Insurance Policy)

This home insurance policy protects mobile homes. The coverage provided is the same as given in the HO-1 and the HO-3 policy. The policy only comes into effect when you are on the move.

For example, if your mobile home is destroyed by a volcanic eruption, then you can claim home insurance. However, if it was parked in an empty lot, then you may not be able to recover anything.

 

DF-1

You are probably wondering what this home insurance policy is for, right? Well, if none of the above policies cover your accommodation, then you can use the DF-1 policy form to insure yourself. This policy covers windstorm and hail, fire and lightning, aircraft, vehicles, civil commotion and riots, explosions, and smoke.

 

Conclusion

There you go… different home insurance policies depending on the space you occupy. Now that you know which home insurance policy covers what perils, you will be able to purchase the right policy and protect yourself and your house. If you are looking for a qualified insurance agent who holds years of experience in this field, then visit Pawson. We provide home insurance against disasters for homes, personal properties, and businesses. To know more about their policies, contact them at 203-481-8898.