Homeowners' Insurance Comparison
How do you know what's covered and what's not covered in your plan? How do you choose the homeowner's insurance plan that's best for you?
There are currently seven standard insurance "packages." As a general rule, the more a policy covers the higher the cost or premium. Also, the higher the deductible- the amount the policyholder must pay before receiving benefits- the lower the cost. When shopping for a policy remember that a home is not adequately insured unless coverage is for at least 80 percent of the replacement cost. Before and after buying insurance you need to prepare and maintain a list of possessions and their estimated value. A thorough and up to date list can save a significant amount of money in the event a disaster does strike. Generally, household and personal possessions are insured for half the amount of insurance on the structure. This means that if the home is insured for $100,000, the contents are insured up to a maximum of $50,000. In the end, you should look for certain features that can save you money. Ask about discounts for adding smoke detectors, security systems and such, which may add to the protection of your home.
· HO-1 The Basic Form: Provides coverage for eleven types of home structure and content damage.
· HO-2 The Broad Form: Provides similar to HO-1, yet additionally covers further environmental and interior damages.
· HO-3 The Special Form: Provides maximum protection over HO-1 and HO-2 and includes coverage over personal belongings, yet excludes flood, earthquake, war, nuclear accidents and similar catastrophes.
· HO-4 Renters' Insurance: Provides liability insurance for tenants living in a house, apartment, or cooperative. Similar to HO-2 and HO-3. Provided by the landlord or building owner.
· HO-5 The Comprehensive Form: Provides the most comprehensive and expensive coverage available to homeowners. This method of coverage may be more cost-effective.
· HO-6 Condominium Owners' Policy: Provides owners with insurance for the interior space that they occupy, plus the contents.
· HO-8 Older Homes Policy: Similar to HO-1 yet differs in that it insures the house for its actual cash (market) value, not for what it would cost to replace.