The Eight Types of Home Insurance

When you purchase a home, whether an apartment, condo, townhouse, or house, if you take out a mortgage, the bank will require you to purchase homeowners insurance. At CG Insurance Agency serving Williamston, MI, we want you to understand your options when choosing coverage for your home.

Your humble adobe might not be very humble nor made of adobe, but it needs insurance. Until you completely pay off your mortgage, the bank actually owns your home. They kindly let you live there since you pay them a house payment each month and expect you to assume the risk to the home. You do that by purchasing home insurance.

The coverage your home gets depends on the type of home. For example, a historical home requires an HO-8 policy, while a recently built home purchased by a homeowner with no or few policy claims typically gets covered under a standard home policy, an HO-3.

A homeowner who has made many claims to their insurance policy typically won’t qualify for an HO-3 policy, so their home gets insured with an HO-1 policy, called dwelling insurance. This policy doesn’t cover as many perils, or natural hazards, as an HO-3 policy.

HO-2 covers more perils than the HO-1 policy. It adds perils such as accidental discharge of water and the weight of snow or ice on the roof. If you want open-peril coverage, meaning your home obtains coverage from any and every potential problem except flooding, you buy an HO-5 policy.

An HO-6 policy gets your condo or purchased apartment all the coverage it could need. While your landlord covers the public areas of the home or apartment building, your condo policy takes care of the interior of your home and your personal items. It also covers the liability you incur when others visit your home.

If you’ve been counting, you noticed HO-4 and HO-7 have yet to appear in the list. That’s because an HO-4 policy is renter’s insurance, so a homeowner won’t need it. You’ll only need an HO-7 policy if you purchase an RV or a trailer.

Contact CG Insurance Agency serving Williamston, MI, for more information on home insurance. Let us help you find the right insurance for your home.