Home Insurance Policies to Consider When Protecting Your New Home

Posted by Brad Pauly on Friday, January 8th, 2021 at 2:56pm.

home insurance concept, house models on lifeboats with coins representing home insurance policiesBuying a house in Texas or any part of the country is a huge, but necessary investment. Purchasing a home is one thing, and protecting it is another. You need to invest in home insurance to protect your house from unforeseeable risks.

Simple house insurance policies usually protect your home and property against destruction and damages from specific events such as extreme weather, fires, and hurricanes.

Without proper home insurance for your Austin home, you will have to rebuild or repair your home if it is damaged or destroyed.

When buying a house, you must understand that not all house insurance policies are the same. There is a variety of homeowners insurance created to cater to different types of property.

For example, there are insurance covers for mobile homes, single-family homes, co-ops, and condos. The type of home insurance you choose will depend on the house you have or intend to buy.

Different Types of Home Insurance for Homes in Austin

HO-1 Home Insurance

An HO-1 insurance policy is the simplest among all insurance policies because it only offers protection to the home structure. It does not cover personal belongings, liability, other expenses, and is not preferred by most homeowners.

HO-1 home insurance is also known as peril policy because it only protects a home in particular situations, including the following:

  • Explosions
  • Damage from vehicles or aircrafts
  • Fire and lightning
  • Smoke riots
  • Hail and windstorms
  • Vandalism
  • Volcanic eruptions
  • Smoke
  • Theft

HO-2 Home Insurance

HO-2 insurance covers both your home and your belongings. Most insurance companies cover personal property irrespective of where they are. If you are buying a home, this is a better insurance policy compared to HO-1. But you HO-2 does not provide liability coverage. That’s why some people don’t prefer it.

Similar to the HO-1 insurance coverage, HO-2 is a peril policy that protects your homes and personal belongings from specific circumstances covered in the HO-1 policy. But this type of insurance only protects against a few extra perils that include:

  • Burning, tearing apart, and cracking of home items
  • Water overflow or accidental discharge into a home
  • Falling object
  • Freezing pipes
  • Weight from snow, ice, or sleet

Before signing policy documents, it is good to cross-check and find out all the incidences that the insurance company covers to prevent any issues in future filing for a claim in case of damage or destruction of your home.

HO-3 Home Insurance

HO-3 is the most common type of insurance for most homeowners. It covers the home structure, personal belongings, liability, medical payments, and any additional expenses. In case you are buying a home using a mortgage, most lenders will require that you purchase an HO-3 coverage.

HO-3 is generally considered a standard insurance policy. It provides what is known as “open peril” coverage and protects your home from all types of disasters unless it has exceptions listed on the policy document.

Nonetheless, you will get “named perils” for personal belongings that apply to disasters listed in the policy document. Home and other structures around will have the perils below excluded:

  • Foundation issues
  • Government actions
  • Defective construction
  • Corrosion and pollution
  • Wear and tear
  • Animal or pet damage
  • Vandalism, theft, or frozen pipes in empty houses

Considering that personal property is often covered under named perils, the insurance company covers personal belongings under the following situations:

  • Damage from ice or snow
  • Damage from aircraft or vehicles
  • Explosions
  • Falling objects
  • Damage caused by an electrical fault 
  • Freezing pipes 
  • Fire and lightning
  • Water heater damage
  • Water damage due to plumbing 

HO-4 Standard Renters Insurance

Also known as renters insurance, HO-4 is a type of insurance cover designed to protect personal property and offer liability.

Sometimes the coverage may include extra living expenses that can assist you in paying hotel and food bills in case your home has been damaged, destroyed, or you were forced to move out.

Since renters don’t own the home, the insurance policy does not cover the building structure. Renters insurance is also a peril policy that covers the following circumstances:

  • Damage from snow or ice 
  • Explosions
  • Damage from vehicle or aircraft
  • Damage caused by an electrical current
  • Hail and windstorms
  • Fire and lightning
  • Falling objects
  • Water damage resulting from plumbing errors
  • Vandalism

HO-5 Home Insurance

If you are searching for a premium home insurance cover, then an HO-5 is all you need. It is the most comprehensive type of insurance cover available in Texas and around the country.

This type of home insurance covers your home, personal possessions, extra living expenses, and medical bills for other people. Besides, the policy has a higher limit available for precious things such as jewelry.

The good thing about this policy is that it covers your home and personal belongings under the open perils cover. Your home is then protected from anything even if it is not excluded from your policy document.

Common exclusions under this policy include:

  • Intentional loss
  • Government laws or action
  • Earth movement
  • Nuclear hazard
  • Mechanical breakdown
  • War
  • Mold
  • Vandalism in cases the house is vacant for over two months

HO-6 Condo Insurance

This type of insurance is specifically for condo owners. The insurance policy covers everything inside and also includes personal liability and extra expenses.

Since condo residents don’t own the entire building but only a unit, there are special insurance covers offered by the condo association.

Under the HO-6 insurance, your condo is protected against the following incidents:

  • Smoke
  • Fire and lightning
  • Explosions
  • Hail and windstorms
  • Riots
  • Vandalism 
  • Theft

HO-7 Manufactured or Mobile Home Insurance

HO-7 insurance covers manufactured or mobile homes such as modular homes and RVs. Like the other insurance, an HO-7 insurance policy caters to the building structure, liability, personal property, and additional expenses.

A home exterior is usually covered by the open peril policy and includes circumstances not clearly defined in your insurance policy document.

HO-8 Home Insurance

Last but not least, there is the HO-8 home insurance cover. This insurance policy is most ideal for older Austin homes or those that may be hard to replace.

Real Estate Agency in Austin, Texas

Pauly Presley Realty is the leading real estate agency in Austin with thousands of active listings every day. We work with new and veteran homeowners in Austin and surrounding areas.  Our professional home finder team is available to help you, from when you first start your home search and throughout the home buying or renting process. 

Are you looking for houses for rent or sale in Austin? Use our interactive map to check out our available homes in Austin. 

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