Free Homeowners Insurance

Since your home is likely your largest and most significant financial investment, it's vital to have a comprehensive homeowner's insurance policy in case of a tragic event. Many homeowner policies also have coverage that extends to the valuable possessions that you keep in and around your home as well as liability coverage in case someone gets injured or hurt on your property.

Basic Types of Homeowner Insurance Policies
There are several different types of homeowner insurance policies. The type of policy you choose will depend on the state in which you live and whether or not your own your home. The most basic policy is called the HO-1, which is a limited coverage policy. This basic policy only covers the first 10 disasters that you claim on your insurance. However, most states no longer offer the HO-1 policy.

The HO-2 policy is a bit more comprehensive than the HO-1, but it's not much better. It provides coverage for the first 16 damage claims. You can also get this type of policy for a mobile home.

The HO-3 is the most popular homeowner insurance policy because it provides comprehensive protection for your home and belongings. There are, however, some exemptions to the coverage, but those exemptions are spelled out in the policy. You can often add "riders" or other forms of insurance to cover things that are exempt in your HO-3 homeowner policy.

There are also several other types of policies that are less common. The HO-8, for instance, is available for older homes to protect the actual cash value rather than the replacement cost. An HO-6 policy is available for condominiums and co-ops. There is also the HO4-Renter policies that protects people who are renting their home and their belongings within the dwelling.

Levels of Coverage
As there are different types of policies you can choose from as a homeowner, there are also three levels of coverage available. Actual cash value is one of the most common terms in a homeowner's policy. It refers to the type of coverage that will replace your home and/or possessions at their current cash value. This means if you had a TV that was worth $5,000 when you bought it three years ago, your insurance may only reimburse you $2,500 because it depreciated 50 percent since you bought it new.

Replacement cost is the more popular level of coverage because it pays the policyholder the price of repairs and replacements at the current value. With replacement cost coverage, there is no deduction for depreciation so the policyholder can replace their belongings without suffering a financial loss.

Extended replacement cost is even more popular than the normal replacement cost level. With this type of policy, you can have any repairs done to your home to bring it back to the way it was before the disaster regardless of the cost. Your insurance company will usually pay an extra percentage of your policy limits to bring your home back to normal. However, these types of policies are not available for older homes.

Having a comprehensive home insurance policy is essential for protecting your investment, your home and your family. It also offers a peace of mind that you simply cannot put a price on.