A Different Kind of Home Insurance

Residence insurance is really not a type of home insurance. It is a policy for homeowners to help protect their properties.

It is also called as “package policy” because of the following coverage:

  • Structure damages of the house
  • Damages on personal items
  • Necessary expenses if a homeowner is unable to reside in his house after the damage
  • Accountability for the person harmed on the property

The coverage depends on the home insurance claims and the policy purchased.

Generally, there are options that a homeowner has in terms of coverage.

Insurance Information Institute (III) stated the types of residence insurance that property owners normally get.

Limited (HO-1) covers ten perils that include fire, lightning, vandalism, smoke and theft damages.

Basic (HO-2) covers sixteen perils that include damages due to ice and snow, pipes that are frozen and some water damages from the appliances.

Special (HO-3) is most widely liked by the homeowners because it can cover all perils, though flood, mudslide, war and landslide damages are not included.

Mobile home insurance and condo home insurance are also available.

There are 3 levels of coverage that must be considered. These are Actual Cash Value which pays the homeowner for the replacement of the house and belongings minus the depreciation, Replacement Cost which pays the homeowner for the replacement of the house and belongings without the depreciation and Guaranteed Replacement Cost which pays the homeowner for the reconstruction of the house and replacement of belongings regardless of the costs.

It is important that homeowners select a deductible that is affordable for them. House repairs can be considered for discounts, as well as for electronic alarms and fire prevention devices put inside the house. Discounts may also be given if both the auto and home insurance were obtained from one company.

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