Home and Renters Insurance Explained

The In’s and Outs of Home Owner and Renter Policies

Here’s a high level overview for the types and levels of insurance that is typically available in each type of insurance and property type.  We’re simply going over some of the considerations as well as covered and non-covered perils.

HO-1: most basic 

Covers: Home and property: actual cash value PLUS 10 perils

i.e. fire/lightning, windstorm/hail, explosion, riots, aircrafts, vehicles, smoke, vandalism, theft, falling objects

*very rare, generally aren’t offered

 

Actual size of hail in Colorado next to golf ball

Actual size of hail in Colorado next to golf ball

HO-2: more basic

Covers: Home: replacement cost; personal property: actual cash value PLUS 6 additional perils

Ie. previously mentioned PLUS weight of ice or snow, overflow from stream, freezing, volcanic eruption, accidental damage from a power surge, accidental tearing/burning etc. from built-in appliances (water heater, A/C etc.)

 

Water heater in home that can cause damage when it fails

Water heater in home that can cause damage when it fails

Snow or Ice Can Easily Cause Damage to Roofs

Snow or Ice Can Easily Cause Damage to Roofs

HO-3*: basic, most common. “all-risk” coverage on your home, with exclusions based on insurance policy.

Covers: Home: replacement cost; personal property: actual cash value PLUS previously mentioned perils

 *Can add a replacement cost endorsement to your personal property coverage for a small additional premium

 

HO-4: for renters

Covers: personal property (inside the property and not in the property) at replacement cost, liability and living expenses PLUS  previously mentioned perils

 

Colorado Apartment Building

Colorado Apartment Building

HO-5: most comprehensive, second most common, “all-risk” coverage on your home AND property

Covers: home and property at replacement cost, high end property such as jewelry, furs etc., PLUS previously mentioned perils

 

HO-6: for condo owners

*HOA insurance, or the “master policy” covers: building structure, common areas, structure of your unit, personal property, loss of use, personal liability, medical payments, loss assessment coverage

*Coverage depends on your condo association’s HOA insurance.

 

HOA Insurance for Condo

HOA Insurance for Condo

HO-7: for mobile home, essentially an HO-3 specifically for mobile homes

Includes: trailers, RVs, sectional homes, modular homes, double wide and single wide homes

 

Mobile Home Insurance

Mobile Home Insurance

HO-8: homes that don’t meet insurer standards, similar to an HO-1

Covers: 10 perils and reimbursement is determined by the home’s actual cash value 

*for older homes with outdated plumbing, wiring, roofing etc. 

 

Key Takeaways:

When in doubt, HO-3  or HO-5 it out

When to HO-3: more often than not, this is the one you will be offered

When to HO-5: if you qualify, go with this one. Upfront it is more expensive but in the long run, it will be the most cost effective

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