Which Homeowner Policy Is Right For Me?
Homeowners insurance protects your home, your possessions, your family, and your finances, but which homeowners policy is the best option for you? Traditional homeowners policies offer liability coverage, personal property coverage, structural coverage, and additional living expenses coverage, but not all homeowners policies are the same. Keep reading to learn more about your options.
HO3 policies are a relatively common homeowners insurance option, and they usually provide the minimum amount of required coverage.
HO3 policies provide dwelling coverage for open perils and contents coverage for named perils. Dwelling coverage protects the structure of your home while contents coverage protects your possessions.
If coverage includes open perils, it will cover any cause of loss that isn’t specifically excluded from the policy.
If coverage includes only named perils, it will only cover losses that are caused by specific, listed, events.
For example, if you have and HO3 policy that lists coverage for fires, thefts, lightning, volcano eruptions, smoke damage, vandalism and windstorms, your property and possessions will be protected if any of those things happen. If however, something that isn’t on the list causes a loss of property, you won’t have the protection of insurance.
Traditional HO3 policies cover about 16 named perils and are a little less expensive than H05 policies.
If you choose an HO5 policy, dwelling coverage and content coverage both include open perils. This means that unless something is specifically excluded from your policy, your losses will be covered, even if something very rare and unexpected happens. For example, if a large animal broke into your home and caused damage to your possessions, an HO5 policy would likely provide coverage, where people with an HO3 policy would have to pay for the damages on their own.
The other HO5 policy advantage is that you do not have to prove that damage was caused by a specific, listed event. Filing claims will be much simpler and less stressful. This means you have less to worry about and can get back to your regular routine quickly.
Which Policy Should You Choose?
In most situations, the HO5 is the best policy because it doesn’t come with as many restrictions. You don’t have to worry about whether or not an emergency will be covered by your homeowners insurance—you know that you have coverage for everything that isn’t excluded.
HO5 policies have a simpler claims process, and although they may cost more upfront, they can save you money in the long run. If you want to get an HO5 policy, you’ll have to qualify first—since this policy offers broader protection, the qualification guidelines are stricter. For example, to qualify for an HO5 policy, your home usually needs to be newer or very well cared for, and in an area that is protected by a fire department.
If you’re interested in evaluating your current homeowners insurance coverage, or if you’re looking for a new insurance policy, Taylor Moore Agency can help. Contact us to learn more about personalized insurance policies that provide the specific protection you need.