House Insurance is also known as Homeowner’s Insurance. In real estate it is known as HOI. House Insurance covers a home and the contents of the home. Mortgage lenders require home buyers to purchase home owners insurance during the life of the home loan to protect their investment. House insurance can also apply to renters and tenants.
House insurance law was written in the late 1940’s which allowed the policies to become legal. Before this, home owners had to buy separate policies to cover everything that could possibly happen to a house like fire, natural disasters and theft.
House insurance policies generally cover the following items:
• Damage to the interior or exterior of the house. The insurance will cover costs of repairs of up to 80% of the value. This does not cover damages caused by neglect of the owner to maintain the house. Coverage will include things like fire, hurricanes and vandalism. In order for the house to be covered for floods, earthquakes, and nuclear hazards, a rider policy would be needed.
• Other structures. This includes detached garages and sheds.
• Personal belongings. The clothing, furniture, appliances, and electronics that get damaged will also be covered. If you have expensive items such as jewelry or antiques, a floater policy will be needed for the appraised value of the items. It is typical for only 50-70% of the value of the items to be reimbursed. This is another reason floater policies are needed. It also covers accidents caused by family living in your house. For example, if your child breaks an expensive antique while visiting another house, the insurance will cover the replacement costs.
• Loss of Use and Living Expenses. House insurance will pay for a house rental or hotel while the home is being rebuilt or repaired. Some policies will even cover the cost of restaurant meals.
• Personal liability for injuries. This will cover someone getting injured while on your property. It also consists of injuries caused by you, someone in your family, or by your pet. Umbrella policies will give additional coverage for injuries caused on your property in case of a lawsuit.
• The last type of coverage includes expenses such as debris removal and landscape repair.
There are also different types of policies depending on the type of house and the type of coverage that is needed.
• HO1. This is a Basic Homeowner policy that will cover the structure and contents due to lightning, fire, etc.
• HO2. This is a Broad Form Homeowner policy that covers more events and disasters covered under the policy. The exact events are listed.
• HO3. This is a Special Form Homeowner policy that covers all risks and events including earthquakes and floods.
• HO4. This is Renter’s Insurance which covers tenants personal property.
• HO5. This is a Premier Homeowner Policy which covers the same as HO3, but more.
• HO6. This is a Condominium Policy to cover condominium owners.
• HO8. This is a policy for older houses. It is modified for older homes where the replacement value exceeds the property market value.
Check with an insurance agent to see what type of house insurance is best for you.