There are a number of people, who consider their home as the biggest asset, they possess. Home insurance providers offer protection for their investment on their home through home insurance. The companies are bound to cover your in case of any damage in sectors like furnishings, the structures on property such as swimming pool or garage. But if you are living in a high-risk area like an earth quake prone zone, then home insurance does not cover natural disasters. Personal liability component is also a part of some of the insurance policies. There are millions of home insurance companies, which provide coverage to homeowners.
Basically a home insurance covers any home structure, personal belongings, your liability to others and in case your house is damaged and you have to shift elsewhere till the completion of renovation, the home insurance policy pays for the additional living expenses.
There are many types of home insurance policies:
HO1: HO1 is the typical home insurance policy, which covers 11 particular kinds of damage such as vehicles, smoke, vandalism, fire or lightning, explosion, riot, aircraft, windstorm or hail, damage by glass or safety glass, theft, and volcanic eruption. As the plan provides limited coverage, it is not very popular among the homeowners.
HO-2: It is more expensive as compared to HO-1 but at the same time it covers for losses from 17 types of damages like vehicles, smoke, vandalism, fire or lightning, explosion, riot, aircraft, windstorm or hail, damage by glass or safety glass, theft, volcanic eruption, damage caused by water or freezing pipes and plumbing.
HO-3: It covers all the losses, except those clearly stated in the policy. It does not cover losses from flood. It is more expensive than HO-1 and HO-2.
HO-4 and HO-6: These two cover property and mostly a certain component of liability insurance and don’t cover buildings. These plans are popular among renters and condominium owners.
HO-5: It is the most extensive home insurance policy. It covers almost 15 percent more as compared to HO-3.
HO-8: It is typically meant for old homes and reimburses for damage on cash value basis, which is replacement cost less depreciation.