Home Insurance Coverage
Secure your Home and Personal Belongings with the Right Home Insurance Coverage
Home Insurance Overview
Home being a vital and expensive investment certainly requires protection against damage, natural disaster, theft and burglary. Thus, Home Insurance was designed to provide protection to your valuable homes as well as your possessions stored in the house. Home insurance provides you financial reimbursement in case of theft or damages caused to the home or the belongings kept inside the house. This insurance provides liability coverage too against accidents in the home or other property. In the U.S residents generally mortgage loan to buy home or any other property and therefore lender before granting the loan ensures that home buyers must have a home insurance. Though, it is not mandatory to purchase home insurance in the United States but still all first time home buyers and current homeowners should have homeowners insurance to protect one of their most vital investments. The perils covered by home insured usually include, loss of home or property, theft or damage caused by smoke, fire, wind, hail, snow, ice or lightning. In the United States some natural events like typhoons, floods, earthquakes and hurricanes along with war acts like terrorism, insurrection or a nuclear attack that can cause damage to the house or property are excluded from home insurance.
Home Insurance Coverage Options
A homeowners insurance plan usually cover repair or reconstruction work of your home it its get damaged by fire, smoke, theft, vandalism or bad weather. A standard home insurance plan also cover belongings that are generally kept in homes like appliances, furniture along with several other possessions. If any people other than you or your family get injured on your property then this insurance will also cover medical expenses and legal fees. Standard Home insurance policies usually not cover jewelry, artwork or other collectibles, identity theft protection, or damage caused by floor or an earthquake. Mostly these are optional coverage and are not included if all home insurance plans of all areas. Homeowners insurance plans usually cover the following:
This is quite the basic coverage included in almost all the home insurance policy that provides coverage on the structure of the home in which you live that include house’s foundation, walls and roof. This home insurance policy also provide protection to other structures attached to the home like deck or a garage.
Personal Property Protection
Home owners insurance policy is not just about providing protection to your home but it may also include coverage for the personal belongings that are kept within the home. In case if the belongings get stolen from the home or get damaged due to fire, then personal property protection may help you pay for the repair or to replace your belonging if it gets damaged by a covered risk.
A typical homeowners insurance policy also comes with liability coverage in which when someone not living in the house with you get bodily injured while staying in your home then the coverage of this policy will help you pay for the visitor’s associated medical bills or for your resulting legal expenses if you are found at fault.
Other Structures Protection
Besides all the above protection home owners also have other structures protection with their home insurance policy that include coverage for other structures that are part of your property but is at separate location from your home like a tool shed, fence or a detached garage.
Home Insurance Types for Single-Family Homes
In the U.S. single-family home is the most common and to obtain insurance for such home and people have five different types of home insurance policy. However, coverage can vary state to state even within the same type of plan. The five different home insurance plan for single-family homes are:
HO-1 – This home insurance plan offer the least and narrowest coverage that is limited to just 11 perils and the most common perils covered bu HO-1 plan are vandalism and malicious mischief, fire and lightning, riots and civil commotion, aircraft, smoke, explosion, vehicles, theft, glass that is part of the home, theft and volcanic eruptions. This plan will covered only those perils that are explicitly listed and will not covered any unnamed peril in the policy. This policy not cover personal belongings in the home. In most of the U.S. states this policy is no longer available.
HO-2 – This home insurance plan covered everything included in the HO-1 plan along with two additional perils that include damage from falling objects and water damage from accidental overflow of plumbing, HVAC and household appliances. This policy also covers personal property in the home and just like HO-1 policy this policy also cover only those perils that are specifically listed.
HO-3 – HO-3 home insurance plan is the most common among the all because it offers broad range of coverage. Sometimes, this plan is also referred as an extended or special homeowners insurance policy form, as this plan covers almost every peril except those that are specifically excluded like earthquake, flood, landslide or mudslide, nuclear accident and sinkholes. However, this policy also include coverage for personal belongings in the home as the same perils covered by an HO-2 policy. Like personal belonging of the home destroyed due to fire will be covered up to the defined limit but belongings destroyed due to falling of an object or due to water from the plumbing overflow will not be covered.
HO-5 – This home insurance policy is just like an HO-3, as it also cover almost any peril that isn’t specifically called out for exclusion. However, the HO-5 plan is considered more comprehensive compared to Ho-3 plan because it covers personal property from almost every peril, unless the item is explicitly excluded. This home insurance plan is suppose to have the most in-depth coverage and hence it costs more than others.
HO-8 – The HO-8 home insurance plan is designed specifically for older homes, which replacement cost exceeds the actual price of the home. Thus, the HO-8 policy is frequently availed by homeowners to insure registered landmarks and architecturally significant structures.
Insurance Types for Condos and Co-ops
HO-6 – HO-6 home insurance plans are designed for condo owners and co-op tenants because every condo or co-op association obtain different insurance plan having different protection level. Therefore, it is essential for the condo owner and co-op tenant to review the insurance plan the association has in place so that they don’t end up purchasing plans having too little coverage or same coverage for their specific unit. Condo owners can purchase HO-6 plan to cover the parts of the building, which they own including the walls of their unit and everything that is kept within. Condo association sometimes avail insurance for the common areas of the building. Co-op tenants do not own their unit specifically instead they own a share of the whole building, even though co-op owners are considered as tenants but they still need HO-6 insurance plan rather than renter’s insurance because of their ownership stake.
HO-4 – HO-4 home insurance plan is designed especially for tenants to cover their personal belongings along with any part of the apartment, which they might own. The home insurance plan taken by owners or landlords usually cover the rental structure in the event of the 11 perils covered by a HO-1 plan. This tenant belongings are not covered in this plan so the tenants are required to have HO-4 plan.
Levels of Coverage
Homeowners insurance policy usually offers three levels of coverage options:
Actual Cash Value – In this level of coverage, homeowners insurance policy will pay the amount that is required to replace the home or possessions that got damaged after deducting for the depreciation.
Replacement Cost – In the replacement level of coverage, the insurance policy will pay the cost that is incurred in rebuilding or repairing the damaged part of home and will also pay the cost of replacing the possessions without deducting the depreciation amount.
Guaranteed or Extended Replacement Cost – This level of coverage offers the highest level of protection. In the guaranteed level coverage the policy will pay the entire amount it costs to rebuild the home as it was prior the fire or other disaster, even if the amount exceeds the policy limit. Thus, this coverage also provides protection against sudden increases in construction costs due to any unexpected situations. However, it doesn’t include the cost of upgrading the house to comply with current building codes.
Leading Home Insurance Companies of the U.S.
With the variety of home insurance coverage options offered by insurers in different price range, no single home insurance company can be termed as the best fit for everyone. Find below some of the leading home insurance companies of the United States that stand apart due to distinct reason:
State Farm – This company is the best choice for home insurance especially for individuals who wish to have lower home insurance costs without sacrificing quality. The company is known to offer home insurance at low rates and has national coverage, thereby giving homeowners access to affordable coverage across the country.
Amica – This company is certainly best choice for homeowners who prioritize quality service because this company has consistently receive great reviews for its customer service. This company has also need named as the best home insurance company for overall customer satisfaction by J.D Power continuously for 16 years in a row.
Farmers – All such homeowners who have to insure high-value properties always prefer Farmers, as this insurance company is found to offer lowest policy rates for coverage limit above $200,000 and it also provides home upkeep discounts that could help save even more.
Allstate – This insurance company is hot among the first-time home buyers, as this company has common and expensive claims tool that allows homeowners to find most common home insurance claims in their ZIP code, which turn out to be quite effective and helpful for the first-time home buyers. The company also offer attractive discounts to first-time homeowners.