Insurance 101 – Home Insurance Basics

Buying a home is one of, if not the largest purchase you’ll ever make. Having property insurance is vital to protecting you and your home in the event of a natural disaster or other accident. There are many parts to a home insurance policy, and these can be easily tailored to your specific needs for coverage.  

There are different types of policies depending on the structure, the two most common ones being:
HO3 – Single family detached homes
HO6 – Single family attached homes (condominiums and townhomes) 

 HO3 Policies  

This policy type covers the dwelling (house and attached structures), other structures (such as a detached garage or shed), personal property/contents, loss of use, personal liability, and medical payments. Your insurance agent will write your policy based on the value of your home and belongings, as well as the amount of liability coverage you opt for in the event someone is injured on your property.  

A deductible is required and generally corresponds with the premium on the policy. The higher the deductible, the lower the premium, and vice versa.  

Your personal property coverage includes items such as furniture, clothes, and appliances. It is important to assess the value of each item in your home, to make sure this coverage amount is accurate. If you have any items of high value in your home such as jewelry, firearms, electronics, or artwork, you can obtain a separate policy that provides additional coverage called an Inland Marine policy.  

HO6 Policies 

This coverage pertains to contents from the walls in. The interior structure of the unit as well as your personal property are covered under this type of policy the same way they would be with an HO3. The difference is that the exterior of the building or structure is maintained and insured by the Home Owner’s Association (HOA) or Condo Association. The HOA maintains what is called a master policy on the property, which includes the buildings as well as any common areas, elevators, roofs, etc.  

Perils and Additional Coverages 

It is important to discuss with your agent and understand whether you have an “All Perils” or “Open Perils” policy. All Perils policies will outline what is INCLUDED, whereas Open Perils policies detail what is EXCLUDED. This will help you decide if you need to add optional or additional coverage.  

Many insurance carriers offer optional coverages within your homeowner’s policy such as water/sewer backup, identity theft, and earthquake insurance. They also offer certain discounts for things like having an alarm system, being in a gated community, non-smoking households, seniors, etc.  

Be aware that homeowner’s insurance does NOT typically cover flood, wind and hail, the land or lot, and pipe bursts.  

 

Call Schirmer Insurance Group today to speak with our licensed staff about your homeowner’s insurance needs. We can help design a policy that is right for you so you are protected from the unexpected!