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Types of home insurance

Types of home insurance Below are some policies or types of home insurance. After going through the following types of home insurance policies then you can make a decision to insure your home and family.

  • HO-1: Insurers use the term HO - 1 to identify a bare-bones policy discontinued in many states. It provides hazard insurance covering a list of named perils, as well as liability insurance. Liability occurs when an owner is held responsible for an accident on his property, such as a visitor tripping over a loose step and breaking her ankle.
  • HO- 2: HO-2 covers the owner's house and other buildings on the property, personal property like furniture, clothes, books and so on as well as liability insurance. The list of named perils is broader than under HO-1. Some policies also pay expenses if the owner has to move into a hotel or apartment while his house is being repaired. The policy covers personal property up to a percentage of the value of the policy, typically 50 to 70 percent.
  • HO-3: HO-3 is the policy most commonly used today, the institute states. It offers the same features as HO-2, but protects homes against any damage not specifically excluded e. g. floods; earthquakes and water seepage are standard exemptions. Personal property is only covered for damage from the 16 named perils in the policy.
  • HO-4: A renter’s insurance policy that covers your belongings against all 16 perils. Most HO-4 policies also provide liability insurance in case someone is injured in your home.
  • HO-6: A condominium or co-operative insurance policy similar to renters insurance. It covers the personal property of condo owners against all 16 perils and typically also includes liability insurance. The type of plan your condo association purchases will impact your HO-6 needs.
  • HO-8: An insurance policy designed for older homes. According to III, older homes are sometimes not eligible for replacement cost insurance, so the reimbursement for damages to possessions or the property would be based on the replacement cost minus depreciation.
  • Cash value. : A cash value policy pays owners the original purchase price of whatever was damaged, less depreciation for wear and tear, the Federal Citizen Information Center states. If the owner bought her house for $80,000 10 years ago, the most she can claim is $80,000 less a decade of depreciation, even if the appraised value of the house is higher.
  • Replacement value: A replacement value policy covers the cost of replacing or repairing a house or personal possessions, regardless of the cash value or the original purchase price. A $125,000 policy, for instance, will pay for repairs and replacements up to the policy's value. A guaranteed or extended replacement value policy will cover expenses above the value of the policy.

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