Choosing the Right Homeowner’s Insurance for You

Are you in the market for homeowner’s insurance? If you owe money on your home, your mortgage lender will require you to carry insurance coverage. But, even if you do not owe money, it is always a good idea to carry insurance in order to protect your investment. In order to determine the type of insurance coverage you need, it is important to understand the different types of homeowner’s insurance policies available.

HO-1 Homeowner’s Insurance

HO-1 homeowner’s insurance is generally offered in a standardized package and offers the most basic form of coverage. Still, this type of insurance will protect you against all of the following:

Fire
Theft
Certain liability issues

HO-2 Homeowner’s Insurance

HO-2 homeowner’s insurance is a bit more comprehensive than HO-1, yet still provides coverage for the same items covered by HO-1. Therefore, this type of insurance policy covers:

Fire
Theft
Certain liability issues
Damage from broken pipes, snow, and ice
Broken water heaters

HO-3 Homeowner’s Insurance

HO-3 homeowner’s insurance provides coverage for just about anything that could possibly damage the home. These policies usually exclude damage from certain types of events, however, including:

Earthquakes
Floods
Nuclear Accidents
Wars

Choosing the Right Coverage for You

Choose the amount of coverage you require is a personal decision that needs to be based on your needs as well as on your budget. Obviously, the more coverage you have on your home, the higher your insurance premiums will be. Therefore, you want to obtain enough coverage to keep you adequately covered while still being affordable. Also, keep in mind that it is possible to add additional coverage and to take away coverage you don’t need. By making some adjustments to the package policies offered by your insurance company, you can make the policy more affordable while also making certain your valuables are properly covered.

While creating a policy with your insurance agent, there are several questions you should ask in order to make certain you are getting the proper coverage. These include:

Do I need additional coverage for my home business (if applicable)?
What kind of coverage do I get for my jewelry and antiques (if applicable)?
How much personal liability protection does the policy provide?
Will my loss be paid at actual cash value or at replacement cost? What is the difference?
How much is my deductible? How much will my premium change if I increase my deductible?
What is included and excluded in the “personal property” coverage?
What types of home improvements can I make to reduce my insurance costs?
How do you handle claims?

By asking these questions, you can get the very best coverage possible while also making certain you are comfortable with that particular insurance company. Of course, you should always shop around in order to make certain you are getting the most coverage for the cost.

About the Author:

Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.byownermls.com/, a For Sale By Owner MLS service, the leading real estate search engine of homes for sale by owner (FSBO). For more information, please visit http://www.byownermls.com/.