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Homeowners Insurance 101

What is Homeowners Insurance?

A homeowners insurance is an insurance for homeowners that is aimed at covering the costs of damages to the home or assets in the home such as furniture and other assets.

It also covers liabilities that arise from accidents in the home. Before getting homeowners insurance, it’s best to consider the different types of insurance policies available and which is most suitable for you, your property and your budget.



Types of Homeowners Insurance

There are three major types of homeowners insurance policies and they include:


Extended replacement costs

Extended replacement cost is a homeowners insurance policy that pays above the insurance limit if the price of construction or repairs have increased.

However, the extension does not exceed 25% of the insurance limit.


Replacement cost

Replacement cost insurance covers the cost of replacing a damaged item at. The replacement cost insurance is affected by the current price of the item being replaced.


Actual cash value

Actual cash value covers the cost of an item based on the current value of the item. For example, if the damaged item was five years old, the insurance will cover a five-year-old item and not a new one.


What Does Homeowners Insurance Cover?

There are eight standard homeowners insurance policies, and they are; HO-1, HO-2, HO-3, HO-4, HO-5, HO-6, HO-7, and HO-8.


Each of these insurance policies cover different things, such as:

  • HO-1 covers basic damages that are only caused by lightning, windstorm, fire, hail, riot or protests, vehicles, vandalism, volcanic eruptions, explosion, aircraft, smoke, and theft.

  • HO-2 covers the same things HO-1 covers and other damages caused by the weight of snow, accidental cracks, overflow of water, falling objects, power surge, and freezing.

  • HO-3 covers a wider range of damages and with exclusions that are listed in the policy. Some exclusions include damages caused by earthquakes, landslides, sinkholes, war, flood, neglect, and nuclear accidents.

  • HO-4 is also known as renter’s insurance and covers all damages covered by HO-3. Only in this case it covers the person renting the property or home. However, HO-4 does not cover liabilities.

  • HO-5 covers both the property and personal belongings. It is similar to the HO-3 insurance policy. However, the property is covered at its replacement cost, while personal belongings are covered at the cost of their current value.

  • HO-6 is unit insurance that covers the property and shared areas. However, the unit owner will have to purchase an insurance plan for areas not covered by the HO-6, such as renovations, personal belongings, walls, ceilings, floors, and personal liabilities, among others.

  • HO-7 insurance policy is very similar to the HO-3 policy, but for mobile homes like trailers, sectional homes, park homes, and more.

  • HO-8 is a more advanced insurance coverage gotten by a homeowner where the other insurance policies do not meet their standard. An HO-8 policy covers the same damages as in HO-1. However, insurance coverage is at actual value cost and not replacement cost.



Rolland & Associates is an independent insurance agency in Powell, Columbus, OH and surrounding cities. Need a homeowners insurance that protects all your investments at the most affordable price? Request a quote today!