How much your home property insurance coverage will cost is not the only thing to consider when you're shopping for insurance.

You need to purchase the right type of home property insurance. You need to identify the proper level of protection your home property insurance can provide. You need to know if there are special provisions included in your home property insurance. These special provisions will provide coverage for your valuables like jewelry, computer, and other personal belongings. In addition, you might also need additional coverage in your home property insurance against such catastrophes as earthquakes, floods, windstorms, fires, and the like.

Home Property Insurance and Mortgage

Most lending institutions require home property insurance before approving your mortgage application. Lenders will use this as a legal underwriting and guaranty.

Home property insurance has several basic policy types. Below are a few of these home property insurance policies.


HO-1 Home Property Insurance Policy

This type of home property insurance policy provides protection for homeowners. The coverage offered by an HO-1home property insurance policy includes the house and possessions against 11 different perils.


HO-2 Home Property Insurance Policy

HO-2 home property insurance policy is also known as broad homeowners' policy. This type of home property insurance policy covers the house and its contents against 17 perils. HO-2 home property insurance policy has premium running about 5 per cent to 10 per cent more than an HO-1 policy.


HO-3 Home Property Insurance Policy

Also called special homeowners home property insurance policy, HO-3 home property insurance policy covers all perils except those that were specifically excluded in the contract. The cost for an HO-3 home property insurance policy is 10 per cent to 15 per cent more than an HO-1 policy.


HO-4 Home Property Insurance Policy

This type of home property insurance policy is specifically targeted to rental property owners. Covering 17 stated perils, HO-4 home property insurance policy includes liability coverage but does not insure the dwelling itself.


HO-5 Home Property Insurance Policy

This type of home property insurance policy covers practically all damages except those caused by earthquakes, wars, and floods. HO-5 home property insurance policy is also known as extensive homeowners' policy.


HO-6 Home Property Insurance Policy

HO-6 home property insurance policy is for owners of co-ops or condominiums. This type of home property insurance policy provides coverage against perils state in the HO-1 policy. The only difference is that HO-6 home property policy only pays for repair costs or actual cash value. Replacement cost may be covered also but it will make the policy costly.