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
Structure of prefabricated units. ...
The Debt-to-Income Ratio’s (DTI) definition is a measure that allows one to compare the ability an individual has to afford a monthly debt payment out of their monthly gross income. ...
Fixed interest rate loan in which the payments are made every two weeks, but the payment is one half the amount of a regular monthly fixed-rate mortgage with the same amortization schedule. ...
Market Analysis in the Real Estate Market is basically research done concerning specific properties in relation to the overall current climate of the real estate industry. A good ...
Opening in the wall of a structure to let in air and light. ...
See accommodation endorser, maker, or party. ...
A real estate owner's policy and rules regarding the use of the property by the tenant. In insurance, a contract that provides coverage against given risks. Coverage limits for real ...
Transfer of real estate from one taxpayer to another that are exempt from federal income taxes. An example is an exchange of property in which ownership of transferred real estate is still ...
A contractual clause where one party assumes a liability risk for another. Thus, a hold harmless clause effectively indemnifies the named party from any liability by transferring the risk ...
Have a question or comment?
We're here to help.