Homeowners Insurance 101: Understand the Basic Options

Article Posted by Expert Author: Carly Jorge  on 03/22/2013

Finding the right homeowners insurance policy can be a challenge for families for a variety of reasons. One of the main challenges is simply understanding what's involved in a policy. There are several different types available and they each offer their own advantages. First up is the HO1, which is also frequently called the “bare-bones policy.” This is typically the choice of those who are getting coverage simply because their mortgage lender requires it and they want to pay as little as possible. It can be a good solution to those in a tough financial situation.

Another option is the HO2 covers everything the HO1 policy covers, such as fire or lightening, but covers a lot more as well, such as building and home collapse and freezing damages. Finally we have the HO3 policy, which is the most comprehensive coverage and is considered the “all-risk” policy. Coverage on this type of policy includes coverage against almost everything, except a few exclusions like rats, termites, shrub and tree damage, and earthquake damages. Another interesting thing to note about this policy is that it only covers the cost of living away from the home for up to 60 days.

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