Know What Your Homeowner Insurance Policy Covers

Know What Your Homeowner Insurance Policy Covers

Just as important as knowing what your homeowner policy covers is knowing what it doesn’t.

HO-1 Policy

This is a basic homeowner insurance policy, and it covers loss or damages for these hazards:




Civil commotion

Volcanic eruption


Malicious mischief








While this is comprehensive, there are states that do not allow its sale. These states require a minimum policy, the HO-2.

HO-2 Policy

Consider this an upgrade to the HO-1, as it covers everything in that policy plus these other perils:

  • Flooding from appliances, plumbing, or other equipment such as HVAC or sprinkler systems.
  • Glass breakage.
  • Falling objects.
  • Weight of ice, snow, or sleet.
  • Damage to some electrical parts caused by power surges (not computers).
  • Collapse due to damage, such as from termites.

If you’re buying this level of coverage for a condominium or co-op, it would be a HO-6 policy.

HO-3 Policy

For the highest level of coverage, the HO-3 policy covers anything that happens with these specific exclusions:

  • Landslides
  • Floods
  • Earthquakes
  • Wars
  • Sinkholes
  • Mudslides
  • Nuclear accidents

So, damage from an attack by mutant ninja turtles would be covered. However, none of these policies would cover damage caused by homeowner negligence, such as poor maintenance that causes mold damage.

Other Homeowner Insurance Coverages

There are some other things that most homeowner policies cover to some extent. These are:

-1- Personal belongings – Your personal and family belongings are covered for loss or damage up to stated policy limits. They’re even covered when out of the home, as an example when you carry them in your automobile.

Be certain that you understand whether you have cash value or full replacement coverage. Cash value will be based on the current value of the property after any depreciation based on age. Full replacement coverage would pay what it costs to replace the item.

High value items like art or jewelry may require raising coverage limits and premiums. The best practice is to take a video of all of your items (still shots too), as well as photos of all purchase documents and receipts. This can save you a ton of time in the event of a claim, and it can result in a higher payout.

-2- Outbuildings, landscaping, fencing – A storage building, outdoor fencing, and landscaping are usually covered as well. There may be a percentage of the total value of the policy that is allotted for damage to these items, or it could be a total dollar amount. Some perils may be excluded, such as flood or wind damage.

-3- Liability – This covers losses or injuries to others due to your property, such as a fall on your porch, or maybe your dog bites someone. If you have something of higher risk, such as a pool, you may want to increase this coverage through the purchase of a separate umbrella policy that kicks in when the other policy coverage is exceeded.

-4- Temporary living expenses – Within stated limits, when you can’t live in the home during repairs, the policy would cover hotel bills and meals.

Discuss your insurance needs with an experienced agent and compare coverages and premiums to cover what you feel you need at a price you can afford.