What to look in a home insurance policy

There are plenty of insurances policies that'll protect your house against a wide number of disasters. More coverage means higher premiums, so take your time to read the fine print in your contract. 

Homeowner’s insurance is a very important issue to take into account. There are many levels of coverages and costs. You should make a thorough evaluation of the risks and your needs, and figure out what kind of coverage you would like to have. Then, you can go to the market asking for quotes and comparing policies and prices.

When the companies offer different coverages for your house insurance, they usually use codes to indicate the coverage's level and the cost associated with it. HO-1, for example, is the most basic type of coverage and protects your home from fire or lightning. 

If you want to improve this coverage, you can ask for an HO-2, often referred to as “broad coverage”, that includes losses or damage due to hail, vandalism, theft, windstorm,  explosion, smoke damage from vehicles and aircraft, glass breakage, and even riots. It also ensures your house against building collapse, plumbing mishaps (such as accidental steam discharge or frozen pipes), damage incurred from the weight of snow, and the accidental burst of water heating systems.

HO-3 includes other structures to your house policy, like garage or boathouse. While HO-4 has the same coverage, it also includes the possibility that you, as a tenant, are able to ensure your personal effects at a rented location.

If you are a condominium unit owner, you can go for HO-6 policies, which offer the ability to ensure items not covered by any policy purchased by the condo association. HO-6 policies can also cover personal effects inside the individual unit.

In the case that your house is old and you're planning to replace floors in bad condition or some old pipes, you can choose the coverage under HO-8 code. Rather than having typical replacement terms, HO-8 policies are modified to insure against the cost of installing modern, updated fixtures and materials. The premium is more expensive, but you should balance if it's worth it by taking into consideration how much it costs to replace all the old electric system at your house.

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