We are under contract to purchase our first home. What should we know about homeowner's insurance before we go shopping for a policy?
Getting homeowner's insurance should be a fairly simple process. Your goal is to get enough coverage to rebuild your house and replace the contents in the event of a total loss of your home. Along with insuring your house, you also need protection in case someone is injured on your property and sues you for damages. The insurance industry classifies homeowner's policies on a scale of 1 to 7, tagging them as, for example, "HO-3." Each level defines a different type of policy, separated by what they cover. Here is a brief list of HO1-7 policies.
HO-1, HO-2 - These basic policies cover the structure and personal property from 11 to 17 named perils. Named perils can include fire, lightning, riot, theft, vandalism, falling objects, snow and ice damage, and faulty electrical and heating systems. HO-2 is broader coverage than HO-1.
HO-3 - This homeowner's policy is even broader and more practical for most people. HO-3 policies protect against all perils except the ones explicitly excluded from the policy. Earthquakes, floods, and nuclear accidents are usually excluded.
HO-4 - This level is considered renter's insurance because it covers your possessions from 17 named perils, but excludes the structure itself.
HO-5 - Similar to HO-3, but it covers all perils on the contents as well as the structure.
HO-6 - If you buy a co-op or condominium, this level of insurance covers personal property, some building items, and adequate liability coverage.
HO-7 - If have an antique or landmark-class home, you may not be able to get a guaranteed replacement policy. Companies figure the cost of rebuilding this type of home with the original materials and craftsmanship to be impossibly high. This policy covers against 11 named perils and will repair damage (with no guarantee on materials quality) or pay you the actual cash value of your home.
If you are considering a home purchase, you need a professional guiding you through the process, now more than ever! Please call me at (215) 513-1333, I would be happy to help or just answer any questions you may have.
~Lisa
Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.
What Should I Know About Homeowners' Insurance? - Copyright © 2011, The Scott Loper Team, All rights reserved.
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The Scott Loper Team
Scott Loper - Associate Broker
Lisa Loper - Sales Associate
Gina Wherry - Sales Associate
RE/MAX Realty Group
439 Main Street
Harleysville, PA 19438
Ph: 215-256-1200 x-213
