Got a highvalue home or pricey belongings? The HO5 is the Cadillac of homeowners insurance. It’s like an HO3 on steroids – both your dwelling and personal property are covered against all perils (minus exclusions). So, if your designer couch gets ruined in a fire, you’re not left crying over the ashes. It’s pricier, but for luxury homeowners, it’s worth every penny.
HO4 and HO6: Renters and Condo Coverage
Not a traditional homeowner? No problem. An HO4 policy covers the renter’s stuff and liability, while an HO6 protects condo owners’ interior walls, personal items and shared liability with the condo association. For instance, should a pipe burst in your rental and fry your laptop, an HO4 comes to your rescue.
Each sort of homeowners insurance is designed to fulfill a purpose, running from bare bones to anything goes. Finding the right one requires fitting your home’s risks with your budget (which we’ll go deeper into coverage specifics next to help you avoid any surprises).
What Does Homeowners Insurance Cover?
You know the types of homeowners insurance policies, but what do they insure? As such, you can consider understanding your homeowners insurance coverage as knowing what’s in your toolbox – it lays bare what you can repair if disaster is about to screw up your home. Your college degree, device of choice, location, as well as your budget dictates just how in varying specifics your policy could differ (many of the core terms have been around since the HO3), but essentially all standard plans break into four main areas: your home’s structure, your personal belongings, liabilities, and additional living expenses. Each of these should be unpacked and some real life examples thrown in as well as flag items which aren’t covered so you’ll never be caught off guard.
Dwelling Coverage: Home’s Bones
The big one is a mandatory item that protects the physical structure of your house, on the roof down to the foundation. Without dwelling coverage, your kitchen is forced to pay off if it has been gutted by fire, or the siding by a windstorm. It isn’t based on market value, but replacement cost, so it may require $200,000 to insure a $300,000 house to rebuild. Struck by lightning? A fire starts and ruins upstairs? Your policy writes a check to restore those walls.