Homeowners Insurance Policies
What is homeowners insurance?
Homeowners insurance protects homeowners financially against disasters that damage their homes. The financial protection insures the home and the things inside of the home. It is also known as hazard insurance and home insurance. Hazard insurance may be required by a mortgage lender to safeguard the bank in the event the home is destroyed.
Hazard insurance is offered for persons who own a home. It can also provide protection against liability in the event other persons get injured in the home. This can include a guest being bitten by the dog that lives in the home.
Insurance is provided for a premium amount per month. Before insurance is obtained, it is decided which type of policy will be obtained as different type of policies cover different kinds of damages.
Different Types of Coverage
There are several types of policies. The HO0 protects against smoke, fire, hail, explosion, lightning, windstorm and civil unrest. The HO1 protects against lightning, fire, theft, vandalism or malicious mischief, windstorm, hail, volcanic eruption, smoke, glass breakage, riot or civil commotion and personal liability. The HO2 protects against the perils listed in HO1 and includes “named perils”, which lists out the events that would be covered. The HO3 is a policy that provides for “all risk” coverage; however, it excludes flood and earthquake coverage. Separate policies are generally purchased for earthquake and flood coverage. The HO5 is similar to the HO3 in that unless a cause of loss is specifically excluded, it is covered. The HO8 provides home insurance for a home whose cost of replacement exceeds the property’s market value. Some policies include “loss of use”, which provides for temporary living expenses in the event the home cannot be lived in.
Hazard insurance can cover new mandates. For instance, a grease fire that started in the kitchen; however, it spread to other areas in the home. Laws that were later passed to allow sprinklers in the home may be covered by the policy. Hazard insurance may cover damages from power outages. This means if food went bad in the fridge, a policy may cover up to $500 to replace food. Some policies cover personal items that are not currently within the home that is insured. If something happens to these personal items, the policy may allow for replacement. However, this may be excluded if the personal items are located in an apartment where renters insurance already covers them.
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