With almost all mortgage lenders requiring homeowners insurance, it is important to know which types are available to you. There are seven types of homeowners insurance that each has varying levels of protection.
HO-1 BASIC FORM – Basic homeowner’s insurance provides the absolute minimal level of coverage for your home. It specifically covers against 10 possible perils and no others:
- Fire or smoke
- Hail and wind storms
- Damage from vehicles
- Damage from aircraft
- Volcanic Eruption
- Riots and civil commotion
It’s worth noting that some mortgage companies do not consider this type of policy to be sufficient coverage for a home. This type of policy is very limited with many states no longer offering it.
H0-2 BROAD FORM – A broad form policy is a slight step up from a basic form. It covers all the perils in a basic form policy, plus additional hazards that are listed explicitly in the policy. A broad form homeowners policy will also provide living expenses if you become displaced from a peril or hazard.
HO-3 SPECIAL FORM – A special form policy is often the most purchased policy for single-family dwellings. It is the minimum coverage usually required by mortgage providers as well as provides a broad range of coverage that is generally affordable.
A special form policy is popular because it provides much more financial protection than broad form, covering you against any perils unless specifically excluded in your policy. This policy also includes insurance for attached structured, personal belongings, and personal liability.
What it does not include, however, is open perils coverage for personal property losses. Personal property is only covered for named perils in the policy, certain restrictions apply.
HO-5 COMPREHENSIVE FORM – Comprehensive form policy covers more perils than any type of policy. Unless specifically excluded in your policy, a comprehensive policy form will safeguard you against all perils. This is the broadest type of homeowners insurance you can get, making it generally more expensive and offered by fewer insurers.
This type of homeowners insurance will cover property damage, personal property (up to a set amount), and personal liability.
HO-6 CONDOMINIUM FORM – A condominium or condo form is made specifically for condo owners. It safeguards an owner financially from loss or damage to personal belongings as well as personal liability protection.
Typically a condo form policy has similar coverage to a homeowners insurance policy and safeguards that which is not covered by a homeowners association.
H0-7 MOBILE HOME FORM – Mobile form policy is essentially the same as a special form policy except it is designed specifically for a mobile home.
HO-8 OLDER HOME FORM – an older home form or HO8 policy is used to insure older homes that would be difficult to replace if destroyed. Typically this policy will insure your home at the market value or the replacement cost.