Homeowners insurance aims to protect your home against damages to the house, or to the belongings within. Your home loan money lender can, and presumably will, oblige you to have homeowner insurance. This insurance has become a necessity today, as it offers legal responsibility to compensate for certain damages, except floods, and other natural disasters.

There are seven types of homeowners insurance in the U.S. They range from HO-1 to HO-8 and offer various levels of protection according to the needs of the homeowner. Damages not covered by standard policy plans (e.g. natural disasters) can be covered by adding riders. It would be a good idea to add the extra policy if you are residing in an area where flood and earthquakes are usually expected.

Some of the homeowners insurance are designed for renters, typically HO-4 or “renters insurance”, which only covers possessions within the home and other isolated events not covered by the property insurance held by the owner.

Things you should know before buying homeowner insurance

Buying homeowner insurance can be particularly overwhelming for first-time buyers. Following are the four basic things you should know when searching for a reliable homeowners insurance provider in your area.

  1. Contact, at least three companies to compare coverage
    You should contact at least three companies to compare the coverage costs, and make sure you get the right sort and measure of scope. Ensure that the insurance provider has a track record of excellence when it comes to customer service. The BBB rating of the company will tell you whether the company is able to satisfy its customers or not.

  3. Ensure you’re getting adequate coverage
    Another important part of homeowners insurance is the level of coverage. Following are the most common levels of coverage:

    • HO-3 – It is based on the broader policy that protects against all dangers except those specifically expelled by the policy.
    • HO-5Is a policy that typically protects newer, well-maintained homes; it covers against all dangers except those specifically expelled by the policy.
    • HO-7 – It’s as same as HO-3 policy, but it’s mostly applied to mobile homes.
    • HO-8 – This policy is particularly designed for older homes. It only covers actual cash value.

  5. 5 terms of policy you should understand
    Following are the basic insurance terms which you should understand;

    • Deductible – The amount you are required to pay out of pocket before your insurance kicks in.
    • Liability Coverage – It is concerned with coverage of medical or legal bills when someone is hurt on your property, usually due to carelessness.
    • Personal Property –This refers to physical property such as furniture, electronics and clothing.
    • Premium – The amount paid by you for insurance coverage, usually annually or monthly.
    • Replacement Cost – It’s that sort of protection that pays the full cost of supplanting your home or individual property, up to the greatest dollar sum.



To avoid any inconsistency and delays in receiving your insurance money for your shelter, you should make sure you document everything and understand these terms completely. This extra effort will ensure that you don’t face any difficulty when claiming for damage with the insurance company.