Different Types of Homeowner’s Insurance Coverage: What You Need to Know

Dec 04, 2023 By Susan Kelly

If you own a home or other real property, do you know what types of insurance coverage are available and how they work? Don't worry if the answer is "No." The purpose of this guide is to provide some solutions about homeowners insurance coverage for homeowners, co-op owners, renters, and condominium unit owners.

The significant types of insurance policies available under the New York standard form are:

HO1 - The Minimum Basic Policy

This policy includes mandatory coverages for named perils, including fire, lightning, explosion, windstorm & hail, snow, aircraft (but not automobiles), riot or civil commotion, and damage directly caused by glass breakage. There is also coverage for accidental discharge or overflow of water or steam from within a plumbing system. Flood resulting from sudden and unexpected direct physical loss is excluded. Coverage for vandalism and malicious mischief is included under this policy. Still, coverage only applies if both bodily injury AND property damage occur in the same incident. There is no liability coverage if your dog bites someone who enters your yard, whether they do so lawfully or unlawfully. If you want coverage for dog bites liability, you must buy an endorsement. This is the cheapest type of policy available. It provides minimal coverage with many exceptions and exclusions.

HO2 - The Standard Policy

This policy can be written to either partially or fully replace HO1 coverage, or it can provide additional coverages that are not included under HO1. The more supplemental types of insurance purchased, the more expensive this policy becomes. One of these supplemental coverages, which comes in two different forms, is called Broad Form Property Damage Insurance. If you have any questions about whether your property is covered, ask your agent about these types of policies.

Here are some examples of questions that may arise:

a) For instance, can damage caused by termites be insured?

b) Can damage to landscaping be insured?

c) Is damage caused by natural accumulations of snow, ice, or sleet covered?

d) Is water damage from a plumbing system covered if it is accidental discharge/overflow rather than intentional misuse by the policyholder?

e) Can losses caused by decay, deterioration, or hidden defects in any part of the house or apartment building be covered?

HO3 - The Broad Form Property Damage Policy

This policy includes most perils included under HO2 (the standard policy). It provides broader coverage for fire, lightning, and explosion perils than HO1. It also covers vandalism and malicious mischief. This broad form of property damage coverage applies only when bodily injury or property damage occurs in your home or apartment, so it does not apply to an automobile. There is also no liability coverage if your dog bites someone who enters your yard, whether they do so lawfully or unlawfully. This policy includes the Landlord's Legal Liability, which covers injuries that occur off the premises (such as a slip and fall on someone else's property) caused by the condition of things kept on your premises. If you want this liability coverage, you must buy an endorsement for it.

HO4 - The Comprehensive Form Property Damage Policy

This policy can be written with or without Broad Form Property Damage Insurance (described above). It provides broader fire, lightning, and explosion coverages than HO1, HO2, and HO3. Still, it excludes flood, earthquake, and war risks unless purchased as endorsements. It also covers vandalism and malicious mischief. Coverage for an automobile is included, but only the named insured or spouse are covered while using that automobile. Liability coverage is provided by endorsements if desired.

HO5 - The Personal Liability Policy

This policy provides limited liability coverages under limits you select. It includes Medical Payments to Others, Bodily Injury to Others, and Property Damage Liability Insurance, so it does not provide broader coverages than HO1, HO2, or HO3. If injury or damage occurs to someone else, this policy will pay up to your selected limits of liability for all medical expenses incurred by them as well as any court-awarded damages due to personal injuries sustained by them (but not pain & suffering). You can purchase separate liability limits for bodily injury and property damage under this policy. If you want coverage for dog bites liability (liability due to attacks by your animal), you must buy an endorsement for it.

HO-6 - The Personal Property floater

This policy covers personal property anywhere globally that is not covered by any other homeowners policy form. The maximum limit of liability is $1,000 unless particular limits are purchased. The Personal Property floater is designed primarily to cover expensive items such as jewelry and firearms. Still, it does not provide broader coverages than HO1, HO, HO3, HO4, or HO5.

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