Types of Home insurance
To protect your home from manmade or natural disasters you need to purchase home insurance. You will get peace of mind if you buy home insurance as the insurance will take care of all expenses which you may incur through some disaster. Normally a home insurance policy covers damage to the house due to fire, theft, burglary, disasters like earthquakes and floods and also pays the expenses for damages to other people because of your house.
The insurance covers the expenses of repairing the damage, the cost of your stay at any other rented place during this time or the hotel expenses. The insured items in your house will be reimbursed if some damage occurs during the period of the insurance policy. Many people insure their houses when they have to travel and go away for long periods leaving the house empty.
Home insurance is also called house insurance, hazard insurance or homeowners insurance. It covers liabilities and legal responsibilities for any injuries or damage to property caused by the homeowner or his family or even his pet to other people. It is a contract which is effective for a specific time period which is decided at the time of buying the insurance. The insurer has to pay a premium to the insurance seller and generally the premium is lesser if there are lesser chances of the home getting destroyed or damaged.
There are different types of home insurance. HO-1, HO 2, HO 3 to HO 8 types are available. HO1 is a fundamental home insurance which provides coverage against fire and lightning damage. It is called the Limited Coverage policy. HO 2 is also a limited policy like HO 1 and it covers windstorm, theft, hailstorms, riots or other such disasters. It is called the basic policy. HO 3 is the most commonly purchased home insurance policy as this covers the house, the structure and the contents, If anyone else gets injured in its vicinity, he is also covered by this policy and hence this is the most favored one.
HO 4 is called the tenant’s or renter’s policy. It covers explosions, lightnings, riots, smoke, theft, volcanic eruptions and destruction. HO 5 covers a house but not a condo or apartment. Otherwise it is similar to HO 3 with a wider coverage. It is called the Renter policy. HO 6 is meant for condo units and their owners. HO 8 is known as an ‘older home’ policy as it is a replacement policy for an old home when the replacement cost is higher than its market value. It is called the Limited Coverage policy.