Yes. A person who owns his or her home would have a different policy from someone who rents. Policies also differ on the amount of insurance coverage provided.
The different types of homeowners policies are fairly standard throughout the country. However, individual states and companies may offer policies that are slightly different or go by other names such as “standard” or “deluxe”. The one exception is the state of Texas, where policies vary somewhat from policies in other states. The Texas Insurance Department has detailed information on its various homeowners policies.
The chart below lists the disasters covered in each of the following types of policies:
If you own the home you live in, you have several policies to choose from. The most popular policy is the HO-3, which provides the broadest coverage. Owners of multi-family homes generally purchase an HO-3 with an endorsement to cover the risks associated with having renters live in their homes.
HO-1: Limited coverage policy This “bare bones” policy covers you against the first 10 disasters. It's no longer available in most states.
HO-2: Basic policy A basic policy provides protection against all 16 disasters. There is a version of HO-2 designed for mobile homes.
HO-3: The most popular policy This “special” policy protects your home from all perils except those specifically excluded. (Click on the link below for a sample HO-3 form; you will need Acrobat which you can download, free of charge, from the Adobe website.
Paper: Homeowners 3 - Special Form (PDF)
HO-8: Older home 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.
HO4-Renter Created specifically for those who rent the home they live in, this policy protects your possessions and any parts of the apartment that you own, such as new kitchen cabinets you install, against all 16 disasters.
H0-6: condo/co-op A policy for those who own a condo or co-op, it provides coverage for your belongings and the structural parts of the building that you own. It protects you against all 16 disasters.
Regardless of whether you are an owner or renter, you have the following three options:
Some insurance companies offer an extended, rather than a guaranteed replacement cost policy. An extended policy pays a certain percentage over the limit to rebuild your home. Generally, it is 20 to 25 percent more than the limit of the policy. For example, if you took out a policy for $100,000, you could get up to an extra $20,000 or $25,000 of coverage.
Even though a guaranteed/extended replacement cost policy may be a bit more expensive, it offers the best financial protection against disasters for your home. These coverages, however, may not be available in all states or from all companies.