If you have done your homework well, you’ve learned there are more costs to be covered in buying a home than paying for the actual home. Some of the costs you have to cover are the deposit, valuation fee, solicitor fee, surveyor fee, stamp duty and homeowners insurance, often abbreviated to HOI.
What Florida homeowner’s insurance covers
HOI is a form of property insurance designed to protect a home against damage to the house itself and the possessions in it. HOI may also provide liability coverage against accidents that happen in the home or on the property.
While other forms of insurance are nothing new, HOI is a relatively recent form of insurance. It was introduced in the 1950s. Before then, homeowners needed to buy several policies to protect against disasters like fire, floods or other events. Change came when laws were enacted to reform the insurance industry in order to meet the needs of homeowners. A standardized policy was adopted and remains in place today. Even with standardization though, there are still differences in policies and it is advisable to understand them well before choosing a policy.
The eight types of homeowner’s insurance
There are eight standardized types of homeowners insurance in the US. They range from HO1 to HO-8 and they provide different levels of protection.
HO1 and HO2
HOI or the Basic Form Homeowner Policy is the most popular. It covers a maximum of eleven items, which are clearly stated in the policy. These are vandalism, shattered glass, fire or lightning, windstorms or hail, theft, smoke damage, volcanic eruptions, riots, and personal liability. Two natural disasters are not covered; floods and earthquakes. HO2 or the Broad Form Homeowner Policy covers these two natural disasters and several other loss events.
HO3 or Special Form Homeowner Policy
While HO1 and HO2 are the more popular options, a good number of insurers offer a varied HO3 policy. It is different from HO1 and HO2 in that it makes it possible for a homeowner to select the events they do not want covered to reduce their premiums. It is clearly indicated on HO3 policies that earthquake and flood protection are not covered. Choosing a policy that allows you to define events you don’t want to protect against allows you to lower the cost of the policy.
HO5 and HO7
These policies are similar to HO3 in that they clearly state the risks not covered in the policy. However, these policies give significantly more coverage and there are less risks listed for exclusion than are on a HO3 policy. For instance, HO5 and H07 provide cover for pets and home fittings and fixtures like Jacuzzis and swimming pools, which is why they are known as the Premier Homeowner Policy types. Different insurers offer policies with subtle differences to compare quotes and the specific risks included and excluded carefully.
HO4, HO6 and HO8
These other forms of homeowners insurance apply in specific situations. HO4 is renters insurance, which does not cover the house but the tenant’s possessions. The HO6, also known as the Condominium policy, is tailored to meet the needs of condo owners. HO8 is modified coverage for older houses that would cost more to replace if they got damaged, than to dispose of, given their market value.
Florida Homeowners Insurance is all about peace of mind. Choose the right policy so you can rest assured you are adequately covered against risks that would see you lose your home or that would reduce its value.