10. Learn about different types of policies
Just like with any other insurance, home insurance comes in different shapes and sizes. It’s a pretty standard thing across the United States, but there can be slight variations. The most popular one is HO-3, which offers open perils coverage. This means that you will be protected from all kinds of disasters, apart from those excluded from the list. Thefts, tornadoes, and fires are examples of such perils.
This kind of policy also insures all your belongings, but only gives you a named perils coverage. If the disaster that falls upon you is not on the list of perils – then it’s not your lucky day. Usually you’ll have three options: cash value coverage (the pay-outs are usually not enough to rebuild your house and replace all your damaged goods); replacement cost coverage (pricier, goes with an HO-5 policy and can fully replace all that you’ve lost); extended replacement cost coverage (the highest protection).
