Homeowner's Insurance Policy
Definition of "Homeowner's insurance policy"
Homeowner’s insurance is a kind of property insurance that covers risks commonly encountered by homeowners.
There are several kinds of homeowner’s insurance policies:
Homeowners-1 (HO-1) - the most basic coverage. Basically, HO-1 provides homeowners protection against catastrophic losses only. HO-1 is a Named Peril Policy, that is; a policy that specifies exactly what it covers.
Homeowners-2 (HO-2) - known as a mid-range policy, the HO-2 provides broader coverage than the HO-1, but it’s not as robust as the HO-3, for instance. It is also a named peril policy.
Homeowners-3 (HO-3) - is the most common homeowner’s policy in the US. The HO-3 is midway between a named perils policy and an open perils policy. That is because under the HO-3, your personal properties (appliances, furniture, cars…) are insured via named perils but the house itself is insured under an Open Peril Policy, which is a list of exclusions of damages insured by the policy. If it’s not on the list, the insurance will cover it.
Homeowners-4 (HO-4) - also known as renter’s insurance, the HO-4 is a policy made for people renting a property.
Homeowners-5 (HO-5) - the HO-5 is one of the most comprehensive homeowner's insurance available. An elite policy, the HO-5 is an upgraded version of HO-3, as it also includes the personal properties under the open perils policy and not just the house.
Homeowners-6 (HO-6) - the HO-6 is for people renting condos and townhomes. Also known as the condo insurance or the townhome insurance, the HO-6 is similar to the HO-4 in scope, but it deviates from it regarding the way some aspects are calculated.
Homeowners-8 (HO-8) - the HO-8 is designed to protect older homes and remodeled buildings that are difficult to replace if destroyed. It is similar to HO-1 as it is also a basic coverage, but the HO-1 usually evaluates the house via replacement cost approach, whereas it’s difficult to do that with HO-8, which typically uses the actual cash value.
Real Estate Advice:
Search our Glossary Terms for the specific definitions of all the types of homeowner's insurance.
And find a real estate agent to help you decide which type of homeowner's insurance is the best for you.
Popular Real Estate Terms
Expected period that property will provide benefits. It is typically less than physical life of the property because the property continues to have physical life regardless of inefficiency ...
When you hear someone in real estate saying there will be a boring test, they don't mean a dull exam is coming up. What is a soil boring test? Let's find out the meaning of a boring test! ...
An individual or business that buys someone else's equity in property but may not assume any responsibility for a loan balance. ...
Any permanent development that has been made to a parcel of land. Improved land features include whether the land has fruit bearing trees or crops producer by labor, landscaping, or ...
Drilled well where water rises through the opening because of naturally occurring water pressure. ...
Measure of the annualized compound growth of a real estate investment. ...
The individual who receives an interest in a life estate after the original life tenant's interest expires. This normally occurs after the death of the life tenant. For example, Mrs. ...
An Appraisal is the evaluation of a real estate property made by a neutral third party expert known as an Appraiser. There are a number of reasons a home Appraisal is done: - ...
Roof having less than a 10 degree slant. ...
Have a question or comment?
We're here to help.