The amount you pay for your homeowners insurance depends on many factors. Think of your personal housing situation, and the assets you want to protect.

The most common types of homeowner policies are:

• HO1 Basic or Standard policy
• HO2 Broad form
• HO3 Special (also called Open Peril)
• HO4 Renters policy
• HO6 Condo policy
• HO8 Older Home Policies

Let’s break it down…

It is important to note that damage by flood is not covered under any homeowners policy. Flood is only covered under a Flood Insurance policy. 

The HO1 policy is very limited in home protection and is not being sold by most companies. This policy covers the perils of fire, lightning, explosion, smoke, theft, volcanic eruption, damage from vehicle, damage from aircraft, and glass breakage.

The HO2 policy covers the basic perils of HO1, damage caused by rupture of your water or heating pipes, falling objects (such as trees), collapse of the building, limited electrical damage to appliances, damage from the weight of ice/sleet/snow, and others.

The HO3 policy is the most commonly sold policy. Some companies refer to these policies as “Special” or “All Risk: It covers everything the HO2 policy covers and more. Instead of listing the perils that are covered, these policies list all perils that are not covered in the policy.

The usual exclusions are: 

• Wear and tear
• Termites
• Rotting
• Collapse of septic tank
• Flood
• War and a few others

The HO4 policy is commonly referred to as Renters Insurance. It’s designed for tenant occupants of a property who don’t own or have an interest in the property. Since the property isn’t owned by the insured, HO4 offers coverage only for personal property and liability. Covered perils are the same as those listed in an HO2 policy. This policy also includes coverage for personal liability, claims expense, first aid for others, damage to others’ property and loss assessments. 

An HO6 policy covers condominium owners or other property owners in similar circumstances such as cooperative apartment buildings or time-share programs. A HO6 provides some limited structural coverage for elements within the unit that are reasonably considered part of the dwelling, such as cabinetry, interior walls, doors, etc. The main intent of condominium coverage is to provide coverage for personal property and personal liability.

The HO-8 is coverage designed for significantly older, if not historic, homes and is known as “Modified Basic Coverage.” Without an endorsement, it provides the same coverages found in an HO1 policy. Because older homes are often constructed using specific materials and techniques that are no longer available or commonly used, the cost to replace a damaged or destroyed structure may be considerably more than the home’s actual market value. Therefore, HO-8 provides for “Functional Replacement Cost.” Functional Replacement Cost refers to the cost to repair or replace the damaged portion(s) of the structure using common construction materials and methods that are “functionally equivalent” to the materials and/or methods originally used in the structure’s construction.

Most policies cover your contents and belongings only for the perils named in the policy, so wear and tear and normal breakage is not covered for your furniture and personal belongings. Be careful! Your homeowner policy limits coverage on some items.

Your policy probably has limits on certain items. Typical limits are:

• Cash – $200
• Jewelry – $1,000
• Firearms – $2,500
• Silverware – $2,500

Check your policy carefully. If you see you don’t have enough coverage, find out how much it would cost to increase those limits or to buy special coverage.

In addition to special coverage for jewelry, silverware and furs, you can purchase specific coverage for such possessions as stamp or coin collections, fine arts, camera equipment, collectibles, watercraft and musical instruments, just to name a few.