Understand Homeowners & Property Insurance

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Homeowners Insurance and Coverage

This section can help you understand more about homeowners and property insurance. The main reason for homeowners insurance is to provide financial protection for your home and belongings against unforeseen events, which can include fire and theft. Additionally, it is for liability protection against claims resulting from accidental injury or property damage to others. An example would be someone falling down your stairs. You could be legally liable for the injuries, so having liability protection is important. Even though buying homeowners insurance is not a requirement to own a home, it is a wise investment. In some instances, it required by the lender. For example:

1. If You Have A Mortgage

If you financed the purchase of your home, the lender will require you to carry homeowners insurance. This is because lenders need to protect their investment against severe damage or total loss to your home.

2. If The Home Is In A Flood Area

Lenders will most likely require flood insurance if your home is in an area likely to flood. Unless you purchase your own flood insurance, a lender may place “forced-flood” coverage on your home, which could be considerably more expensive, and provides less coverage.

Basic Coverage Policies

A standard homeowners insurance policy includes four essential types of coverage:

  • The structure of your home. The policy pays to repair or rebuild your home in case of damage from a covered event on your policy. Therefore, it’s important to buy enough coverage to rebuild your home. It will not pay for flood damage or routine wear and tear.
  • Personal belongings. The policy covers your furniture, clothes, and other personal items if stolen, destroyed by fire, hurricane, or other insured disasters. More so, this coverage extends to anywhere in the world.
  • Liability protection. Provides protection against lawsuits for bodily injury or property damage that you, family members, or even pets cause to others. Part of this protection includes medical coverage. For example, you can submit medical bills up to the limit of the policy in case an injury occurs in your home.
  • Additional living expenses. This coverage helps you pay for living expenses if your home becomes unlivable due to a covered disaster. Some of these expense include hotel bills, restaurant meals, and other living expenses.

Other Policy Options

Different types of homeowners policies are fairly standard throughout the country. Individual states and companies may offer policies that are slightly different and can call their policies certain names. Depending on the company, different options and add-ons are available as well.

Policies If You Own Your Home

If you own the home you live in, you have several policies to choose from.


This is a limited coverage policy. In other words, it’s a “bare bones” policy. It covers you against the first 10 different disasters:

  1. fire or lightning
  2. windstorm or hail
  3. explosion
  4. riot or civil commotion
  5. damage caused by aircraft
  6. damage caused by vechicles
  7. smoke
  8. vandalism or malicious mischief
  9. theft
  10. volcanic eruption

This policy is no longer available in most states.


This is a basic policy. A mobile home or a manufactured home insurance policy is usually a version of an HO-2. It protects your home from all 16 different disasters, which your policy will specify. In addition to the 10 disasters listed above, an HO-2 policy includes:

  • falling objects
  • the weight of ice, snow, or sleet
  • accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance
  • sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system
  • freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance
  • sudden and accidental damage from an artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component).


This the most popular policy. Unlike the policies above, this policy protects your home from all disasters except floods, earthquakes, war, nuclear accident, landslides, mudslides, sinkholes, and others which are specified in your policy.


A policy designed for older homes is the HO-8. You would purchase this policy, for instance, when your home is too old to qualify for an HO-3. Full replacement cost may not be available for some older homes either. Therefore, this policy usually reimburses you for damage on an actual cash value basis usually at market value.

Policies If You Rent Your Home Or Own A Condo


Renter’s insurance is the common name for an HO-4, and is for those who rent their homes. Whether you rent an apartment or a house, you have coverage for your personal belongings along with the parts of the apartment or house that you own. This could include new kitchen cabinets that you install. This policy protects you against the 16 possible disasters as listed in the HO-1 and HO-2 policies.


This policy is for those who own a condo or co-op. It provides coverage for your belongings as well as the structural parts of the building that you own. It protects against all 16 disasters listed in the HO-1 and HO-2 policies. Both the HO-4 and HO-6 policies have the option to add liability coverage as well.

Since the choices for homeowners insurance policies can be overwhelming, we will help you assess your needs according to your individual lifestyle. Please contact our agency today for a free homeowners quote, and we will begin working to help you find the protection you deserve.