Your Guide To Property Insurance

Need Home Insurance? Be Sure To Understand The Different Packages

With each insurance provider branding home insurance in their own unique way, it can make selecting the best package confusing, especially when buying home insurance for the very first time. There are actually a lot of similarities between packages, and it's important to know what they are so you can select the package that's best for your needs.

HO3 vs HO5

For the most part, an insurance provider will offer you two basic packages that are an industry-wide standard. They may be called different names with each provider, but the coverage they provide will be the same.

An HO3 package will have the bare minimum coverage that you need for your home. If you have financing through a mortgage lender, this may be what you need to meet their requirements to have home insurance. An HO5 package would be an upgrade, since it removes limitations in an HO3 package. While there are many other kinds of insurance packages, those are the main two you need to be concerned about.

HO2 will provide basic coverage to the structure of the home, which is what your mortgage lender cares about because they still technically own the home until your mortgage is paid off. HO5 expands coverage to personal property, which gives you coverage in situations like theft.


Know that each policy will also list specific exclusions that damage is not covered under, and will require an additional policy if you want coverage. For instance, a common exclusion will be flooding. Even in an HO5 policy, there will not be any coverage for if water reaches the interior of your home from the outside. This additional policy may be expensive, and could be required by your mortgage lender if you live in an area that is in a FEMA designated flood zone.

The same goes for protection against earthquakes. It is another natural disaster that requires special coverage, and since it doesn't affect all parts of the country, may be required if your area has a high risk of getting them.

What To Look For

The key to comparing insurance companies will be to identify the packages based on the names given to them, and then comparing the prices. It may not always come down to what company offers the lowest price, but what type of coverage comes within that package that will meet your needs.

For more info, work with a local insurance agent from a company such as Ronald H. Krupa Insurance Agency.