A robust homeowners insurance policy protects life’s most precious possessions - family and the biggest asset in one’s portfolio, a home.
In fact, the homeowners insurance policy serves as a safeguard for Massachusetts residents.
Whether it's a single-family, town-home, condominium or an apartment, homeowners insurance not only covers damage to your property and your family but also protects guests and your personal belongings.
Who buys homeowners insurance?
Homeowners insurance is a type of policy required for buyers when they are purchasing a new house.
Mortgage lender protects themselves by requiring buyers to ensure their homes with a homeowners insurance policy.
Often, these policies are overlooked by first-time home buyers, because they are trying to find ways to save money.
But the right approach should be to find insurance that will protect your investment as well as your personal belongings while saving money
What is homeowners insurance policy for?
Homeowners insurance is a multi-line policy that provides property and liability coverage in a single package.
The homeowners' insurance package ensures that there are no gaps and overlapping in your coverage.
Here is a list of six property damages that homeowners insurance covers:
Furthermore, buyers have the option to choose from six different types of homeowners policies that provides identical liability coverage.
What differs for each form of a homeowners policy is their property coverage that allows you to select the option that best suits your needs
The following is a list of the six types of homeowners policies and perils, along with terms that every first-time buyer needs to know:
HO 2 - Broad Form; Owners Occupant
“Broad Form” refers to a policy that extends beyond the basic insurance coverage in cases of rare events or perils.
Owner Occupant refers to the person who holds the title of the property and is also the property’s residents.
HO 3 - Special Form; Owners Form
A “Special Form” or also referred to as “Causes of Loss” which refers to a special type of policy.
This policy covers losses that are caused by any peril except those that are specifically excluded from the policy.
HO 4 - Tenants
“Tenants” or “renters” is a person or a group of people that lives in a place owned by someone else.
HO 5 - Comprehensive Form; Owner Occupant
In comparison to Broad Form that is mentioned above, a “Comprehensive Form” provides insurance in return for the premium and compliance of the policy.
The Broad Form and a Comprehensive Form are the two main types of forms of homeowners insurance policies.
HO 6 - Condominium Owners
The term “Condominium Owners” refers to a building or unit being owned by a condominium association and managed professionally.
HO 8 - Modified Form
The “Modified Form” refers to a policy that provides coverage to basic named perils, property damage, liability coverage, and medical expenses, but has limited insurance due to replacement cost exceeding the market value.
Why homeowners policy is important?
At BRZ, we understand that buying your first home will be one of the most significant investments you will ever make, both economically and emotionally.
We care about informing our customers and the many coverage choices and options that are offered from our insurance policies.
Check out our previous post to learn more about renters insurance.
Stay tuned for our next post to learn about 4 kinds of homeowners insurance coverage.
We'll speak about how to select the right policy that will help you save money.