Homeowners insurance is designed to provide coverage for different types of property for damage caused by perils. Perils are causes of loss—like tornadoes, fire, theft, and the like. You may choose from two general types of policies:
- A “named perils” policy that covers specific causes of loss which are named in a list.
- An “open perils” policy that covers all causes of loss with the exception of certain perils like flood.
You may add further coverage to all plans.
Basic types of homeowners insurance include:
- Homeowners 2 (HO-2) – This type covers specific, named perils, such as fire, theft, windstorm, and building collapse.
- Homeowners 3 (HO-3) – This type covers all perils, but excludes flood, earthquake, and other events.
- Homeowners 4 (HO-4) – HO-4 is coverage for renters.
- Homeowners 6 (HO-6) – HO-6 is coverage for condominium owners.
- Market Value or Older Homes – This type of policy is designed for older homes that would be cost-prohibitive to repair should they suffer a peril.