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
Siding made out of aluminum, plastic derivates, or cement asbestos having ridges and valleys which is attached to the sides of buildings. ...
Heterogeneous (as opposed to homogenous) means diverse in nature applied to a place or object composed of separate and distinct parts. In other words, heterogeneous describes something that ...
Expecting or looking forward to something happening. ...
An assurance a loan's financial obligation will be secured by a third party. ...
Concrete with steel rods inserted into it to provide additional working load support. The premise is that both materials will act together in resisting loan stress. ...
Similar property. Comparing like property. properties that are side by side but do not meet. They are in the same direction with a constant distance. ...
Market where mortgage loans can be sold to investors. The availability of funds for financing real estate is affected by economic conditions, both local and national. The result is that at ...
The term accusation refers to a declaration made by an individual about another individual or entity having behaved in an immoral, improper, or wrong manner. The two parts of an accusation ...
Claude in a contract, title, or mortgage that is subject to being annulled, repealed, or revoked upon the satisfaction of a claim or completion of a future event. ...
Have a question or comment?
We're here to help.