If you own the home you live in, you have several policies to choose from. The HO-3 is the most popular choice among homeowners.

This "bare bones" policy offers limited coverage. An HO-1 policy provides protection against only the following perils: fire or lightning, windstorm or hail, explosions, riots or civil commotions, damages caused by aircrafts, damage caused by vehicles, smoke, vandalism, theft, and volcanic eruptions.

The broad form (usually called the HO-2 policy) covers policyholders against:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damages caused by aircrafts and vehicles
• Smoke
• Vandalism and malicious mischief
• Theft
• Glass breakage
• Removal of property endangered by a peril

The HO-2 also covers:

• Building collapse
• Freezing or accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire protection sprinkler system or from a household appliance
• Falling objects
• Weight of ice, snow or sleet
• Sudden and accidental rupture or bursting of steam or hot water heating system, air conditioning unit, or automatic fire protection sprinkler system

The special form (HO-3) provides comprehensive coverage for "all risk" except for certain specified perils, such as earthquakes and flood, and provides coverage for damage to personal property caused by any of the covered perils.

Designed for older homes, this policy usually reimburses you for damage on an actual cash value basis which means replacement cost less depreciation. Full replacement cost policies may not be available for some older homes.

See Also:
If You Rent
If You Own Your Condo