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Different Types of Home Insurance Explained

A home can be a family’s largest investment. It only makes sense to get the best protection and care possible without pay more to protect the hom than the house itself is worth. With many types of home insurance available, it is possible for every homeowner to find the right type of home insurance to protect their house and everything contained therein.

Basic Classifications

The Insurance Service Office, a private company that has standardized home insurance policies has designated a list of types of policies for homeowners insurance. The Basic Form Homeowner Policy or HO1 covers the basic threats to homes including fire, wind, theft, volcano and more. Broad Form Homeowner Policy or HO2 adds to the list of basic threats to include those that may be more rare and uncovered by the HO1 plan. The other standardized policies cover a variety of risks including risks to any personal property within the house, personal liabilities on the insured property and more. Individual policies, however, designate what specifically is covered under the terms of that contract.

Structural Coverage

The most common thing covered under home insurance policies is the house itself. Damage cause to the structure of the house, itself, as well as any connected buildings such as garages or porches are all covered  for certain risks under a structural coverage policy. These types of risks can include things such as damage caused by fire, lightning, wind, theft, and even vandalism. This coverage will ensure that any damage inflicted on the physical structure of the house will be repaired or replaced.

Content Coverage

Content coverage accounts for all of the things contained inside of the house.  This can include furniture, art, electronics and personal belongings. Typically this coverage estimates the contents of the house, and will pay out a large lump sum in the event of fire or tornado damage. If only specific items of value are stolen or vandalized, a police report detailing the items taken can be turned into the insurance company, and the total value of the items will be paid to the insurance policy holders.

Special Coverage

Some specific risks and items are not covered under basic structural or content coverage policies. For example, flood or earthquake insurance must be purchased in addition to basic home insurance coverage as these natural disasters are often quite expensive and widespread over an area, making it cost prohibitive for insurance companies to provide coverage generally. Special coverage may also be needed to insure high-value items such as priceless works of art, jewelry, or antiques. This insurance must be procured on an individualized basis, often requiring third party appraisal of the high-value items.

Renters Insurances

Finally, for those who don’t necessarily own a home but own a good deal of personal belongings, rental insurance is available. This unique form of home insurance allows for tenants to provide for the same protections for their personal property as homeowners should theft or structural damage to their rental property affect their belongings. Renter’s insurance is a great way to protect against risks that may be out of the tenant’s individual control; a fire in a neighboring apartment can easily spread and destroy an entire building and several families’ worth of belongings.

Home insurance provides peace of mind and security for whatever place a family finds home. By buying coverage for both home and belongings, an individual can protect all he or she has come to call their own.

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