It is important that you know the 7 types of Home insurance plans available in the market before you choose what may be right for you. What differentiates one home insurance plan from the other are the types of circumstances they cover.
It should interest you to know that most basic homeowners insurance policy covers 11 types of disasters – fire / lightning, aircraft, explosion, riots / civil unrest, vehicles, wind / hail, volcanic eruptions, vandalism, theft, smoke, and self-damaging issues (such as part of a building falling on itself, etc.).
The list can be expanded to include the following disasters – water damage, electrical surge damage, falling objects and snow / sleet / ice.
The 7 Types of Home Insurance Plans you must know are listed below:
Type 1: This is your usual homeowners insurance plan which covers your home and property against losses due to the 11 disasters listed above.
Type 2: This plan includes the Type 1, in addition to other more specific disaster circumstances like snow, falling objects (like trees), water damage (ie bath water or washing machine overflows, or dishwasher breaks), and electrical damage (power surge ).
Type 3: The type 3 plan includes extended / specialty items, in addition to all of the above listed items. The only disasters that this plan did not cover include war, earthquake, flood, and nuclear blasts.
Type 4: This is the Renters' insurance coverage. This type of insurance will protect your personal property from the above listed items.
Type 5: This plan takes care of complete risk coverage for your building and property.
Type 6: This policy is designed for Condominium coverage. Condominium insurance provides coverage for your personal belongings and the improvements you have made to your unit's interior. It also provides financial protection in case you unintentionally injured someone or damage their property. This type of insurance policy covers personal property from the above disasters (all 17).
Type 7: This policy provides for older homes with historic value. Coverage includes protection from the basic 11 disasters listed above. Under this plan, coverage is limited to repairs or cash values of the items involved. The rebuilding or replacement cost is not included in this, since some aspects of the home (like the historic significance) can make these costs higher than current market value.
It should be noted that the most popular plans today involve Type 2 and Type 3.
There are several variations of the above plans. There are special policies that can be used to cover mobile homes. There is also the landlord insurance which covers the actual dwelling, but not the property within.