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
Large scale map of an urban area detailing land use. City plans are essential for projecting the growth, development, and redevelopment of the urban area. The major objective of a city plan ...
Organizational governing group. Either an appointed or elected body overseeing the management of an organization and rendering advice on current issues. Members are legally responsible for ...
Type of mortgage, which is not based on a constant interest rate. ...
A certificate of ownership in a real estate company. Pledged assets for a borrowing. An example is an office building serving as collateral for the mortgage. Way of protecting property ...
Partially amortized and requiring a lump sum (balloon) payment at maturity. ...
Same as term deed of trust: A document that conveys title to a neutral third party (trustee) during the period in which the mortgage loan is outstanding as collateral for a debt. ...
If you are involved with real estate, chances are you've come across the term "convey" or conveyance. But what does convey mean in real estate? This term is crucial whether you're buying, ...
Siding made out of aluminum, plastic derivates, or cement asbestos having ridges and valleys which is attached to the sides of buildings. ...
Easement with the objective of keeping scenic beauty or to forbid constructing something else blocking that view. The property is retained in its natural setting. ...
Have a question or comment?
We're here to help.