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
Loan with a significant down payment with the balance being paid in equal periodic payments over a short time period. There is no interest charge. An example is when a seller of real ...
Early American style 1 story house with a steep gable roof covered with shingles. The bedrooms are on the first floor, but the attic is often finished and made into additional bedrooms. ...
Exchange of products or property between individuals in which no cash is paid. ...
percentage relationship of a specific part of property to the whole property. An example is the square footage of one office to the square footage of all offices in an office building. ...
Right to peaceful enjoyment of property while the legal title is held by one person and the property is used by another. ...
Borrower's right to redeem his property by immediately paying off the loan balance and any related costs. ...
Method of constructing a brick, block, or stone wall using mortar in various overlapping patterns. The brick pattern is extremely important in terms of adding strength and stability to the ...
Bond collaterized by real assets. Two kinds of mortgage bond are senior mortgages and junior mortgages. A mortgage bond may have a closed-end provision that prevents the firm from issuing ...
The portion of a structure providing the primary ground support. Foundations have a foundation wall forming a permanent below grade retaining wall. All modern foundations rely on concrete ...
Have a question or comment?
We're here to help.