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For many of us owning a home is dream come true, however sometimes we do not think

about, nor are we aware of, how to insure it.

Types of Homeowners Insurance

If the purchase of your home is being financed, your lender will obligate you to purchase homeowners insurance. Lenders mandate this because they do not want to risk the depreciation of the property’s value or the loss of their investment.

If you own your home outright or purchase totally in cash then carrying homeowners insurance is optional; however it is worth purchasing or considering.

Coverage Options

What to take into consideration when deciding on how much insurance coverage to purchase for your home.

• Age and value of your home- not just for the amount of coverage but also type of coverage. Coverage is most of the time standard and is set by ISO (Insurance Service Office).

Types of Homeowners Insurance

• HO-1 - The most basic policy. Limited coverage. It covers it the event of fire or lighting.

• HO-2 – Basic policy but offers broader coverage. It covers theft and vandalism, hail damage, collapsed building

• HO-3 - The most popular policy. Specialized insurance coverage. It protects against most hazards.

NOTE: Anything not covered under this type of coverage will be listed as exclusions on your policy. This a common policy homeowners with endorsements or riders being added to purchase to include the otherwise excluded coverage that may be added.

• HO-5 - Deluxe coverage. This coverage automatically includes most items excluded by HO-3.

• HO-6 – For condo owners or co-op. It covers not only personal property but provides liability protection.

• HO-7- For mobile home owners. It covers not only personal property but provides liability protection.

• HO-8 modified home insurance policy. Designed specifically for owner-occupiers of older homes. Coverage is similar in nature to HO-1. However, the dwelling is always insured for its market value instead of its replacement value. This recognizes the fact that the replacement value of older homes invariably exceeds their market value. Coverage is available on a basis similar to that of an HO-5 policy, in that perils which are not specifically excluded are covered.

Renter Options

• HO-4 - Exclusively for renters. Those who rent a home, condo, or an apartment. Many who rent tend to have the misconception that sent they do not themselves own the property; they do not have to or need to purchase home insurance. Keep in mind though you are renting as a renter you are still at risk for disaster; such as: fire, vandalism, theft, and others.

This type of policy protects against these events which is those covered in HO-2. As a renter you also get under this policy personal liability insurance as part of your standard coverage.