What is home insurance

Home insurance is also known as homeowner’s insurance. It provides coverage of a personal accommodation. Within the framework of this insurance a set of losses is covered. They include damage that happens to the home itself, the belongings, the additional living expenses and the liability insurance for events that may occur inside the home or within the specified territory.

Homeowners insurance belongs to the category of multiple-line insurance policies meaning it comprises liability coverage as well as property insurance. The premium that is paid for it is indivisible, i.e. you pay a single amount of money for all risks.

The homeowners insurance cost is defined by the amount necessary to replace the accommodation.

Any other supplements to the contract also affect the ultimate price. Inflation factor is frequently taken into consideration when concluding an agreement.

Homeowners insurance is valid for the limited period of time, although it is possible to purchase
perpetual insurance in some geographical locations.

Homeowners insurance forms are highly standardized and split into the following eight categories.

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Dwelling Fire Form (HO0) covers against such perils as windstorm, explosion, civil unrest, smoke,lightning, fire. The policy doesn’t secure personal liability or private belongings.

Basic Form (HO1) covers against 11 risks that are clearly specified: vandalism or malicious mischief,smoke, glass breakage, windstorm or hail, explosion, riot or civil commotion, theft, fire or lightning,volcanic eruption, personal liability and losses from vehicles and aircraft. Presently many states don’t provide HO1.

Broad Form (HO2) is an extended form unlike the previous one since the list includes 16 perils.

Special Form (HO3) is a common scheme purchased by the owners of single-family houses. It is an “all risk” insurance but flood and earthquake are excluded from it.

Contents Broad Form (HO4) is also known as tenants form. The personal property is covered against the same risks as indicated in HO2 and HO3. Liability coverage is available too.

Comprehensive Form (HO5) is much like HO3 scheme and covers against all perils unless they are
intentionally excluded from the contents.

Unit-Owners Form (HO6) is designed for the owners of condominiums. Such parts of the building as ceiling, walls and floor are protected. Personal property is insured likewise.

Modified Coverage Form (HO8) is developed to cover old dwellings in case its replacement cost is bigger than its market value.

If the loss did happen you are obliged to inform the insurance company. Don’t procrastinate with the notification, the right time is very important to launch the whole procedure. Claims adjuster is assigned after the notification who is obliged to start investigation process and collect all relevant information.