It seems like every insurance company out there has their own brand of homeowners insurance. This can make choosing the right package difficult, especially for first time homeowners. The truth is that no matter the price, or brand, most home insurance packages are similar. Here's how they're mostly the same.
Starting With the Base Standards
Most home insurance policies already consist of standard, industry-wide packages. In general, you're likely looking at one of these two offerings.
- HO3 – Often considered the basic, standard, or minimum amount of home insurance available.
- HO5 – Often considered an upgrade to the HO3 policy as it removes some of the HO3's limitations.
There are other types of coverage as well, but these two are the most ubiquitous. In fact, no matter what an insurance company calls their coverage options, the odds are you can easily figure out if it's just a standard HO3 policy. Just check to see if the following apply:
This means the policy will cover the home itself for anything except for some specifically excluded. The policy will list these exclusions. They usually include war, neglect, earthquakes, and various other things.
The policy will only cover personal property if a named peril is in play. These too are explicit. They can include things like fire, smoke, vandalism, theft, etc. If an insurer offers a policy similar to this, then it's nothing more than a standard HO3.
An HO5 policy adds open peril coverage to personal property. So it upgrades a basic HO3 by adding a fuller coverage umbrella. Many insurers will call it by another name, but if that's the only difference, then you're looking at an HO5.
So What Exactly Are You Paying For?
Given everything, you may find yourself tempted to choose whoever offers the cheapest price for the type of insurance you want. If the base packages are mostly the same, why pay extra? However, it's important to remember that insurers have some flexibility with their coverage.
Insurers may throw in many extras with their HO5 equivalent. Or, their HO3 may have a few extra benefits beyond the standard package. That's why it's important that you know something about these standard packages. Once you know what everybody offers as standard, you can make a more informed decision.
For example, if you see what amounts to an HO5 policy at an HO3 price, you'll know it's an excellent deal. Conversely, if you see something that looks like an HO3, but seems to lack a feature, or has far too many named exclusions, you'll know to look elsewhere.
Familiarize yourself with the standard packages. From there you should start your search for home insurance with a reputable insurance company like Ronald H. Krupa Insurance Agency.Share