Let’s say you have a kitchen fire, or someone breaks into your home and raids the jewelry box. Unexpected events like these can leave you without a roof over your head or with a huge financial loss.
This is where your homeowners policy kicks in.
After an event, contact your insurance company and make a claim. You may have to fill out forms or provide documentation like a copy of a police report if there was a break-in.
Once you file a claim, your insurance company will assign a claims adjuster to your case. The claims adjuster assesses the damage and determines the amount of payment you’re eligible for.
That sounds pretty simple—but there are a lot of factors that impact how smoothly that process goes. And your payment can vary greatly depending on the type of policy you have, the amount of coverage, and the kind of event that occurred.
You don’t want to wait until something happens to find out your homeowners policy isn’t going to save the day.
Because your homeowners policy is a type of insurance, it’s complicated. Even the way the industry describes policies can be confusing.
Common types of homeowners insurance policies
1. HO-1: Basic Form—This form lives up to its name; it’s basic. HO-1 policies cover only the structure of your home. There’s no protection for your personal belongings and no personal liability coverage.
2. HO-2: Broad Form—An HO-2 policy expands on the coverage offered by the basic form. In addition to the structure of your home, specific systems like the HVAC may also be covered.
Plus, you also get coverage for personal belongings, and sometimes it includes liability insurance as well. But this is a “named peril” policy, which means it will only cover damage from events outlined explicitly in the policy.
3. HO-3: Special Form—This is the most common type of policy because it offers the broadest coverage for your house and personal belongings. Plus, you get personal liability coverage if someone is injured on your property.
It also covers attached structures, like a garage or the back deck. Best of all, coverage isn’t limited to named perils—unless something is listed as an exclusion, it should be covered.
4. HO-5: Comprehensive Form—If you want the most coverage available, this is the homeowners policy to choose. It’s considered an “open-peril” policy, which means it will cover almost anything that could happen to your house or personal property.
An HO-5 policy gives you more personal liability coverage, too. But certain things, like damage from an earthquake or flood, are still usually excluded.
Special types of homeowners insurance policies
Outside of those four basic homeowners policies, some forms deliver specialized coverage.
- HO-4: Tenant’s Form—Protection for your personal belongings if you’re a renter. More often referred to as renters insurance, it also provides liability coverage.
- HO-6: Condo Form—This insurance covers personal belongings and personal liability for condo owners. It’s supplemental to the policy held by your HOA, and will usually cover your interior walls, floors, and ceilings.
- HO-7: Mobile Home Form—Designed for manufactured homes, this policy usually covers the same things as an HO-3 policy.
- HO-8: Older Home Form—If you have an older home, where replacement costs potentially exceed current market value, this policy extends extra protection. It covers damage and repairs that require materials (like plaster for walls) that are no longer commonly used.