While we are dreaming a huge, designer swimming pool surrounded by lush foliage would be gratifying. We want a home that reflects our unique personalities. Once we have this magnificent, unique home we must cut the grass, paint the trim, water the plants, mop the floors and purchase the perfect homeowners insurance policy– so much for dreams. First, there is no perfect policy. All polices have exceptions, exclusions, criteria and deductibles. Sorry.

Understanding homeowners insurance is a very complex undertaking. The following information will give you some things to think about as you compare policies. This is not meant to be an in-depth, comprehensive explanation of insurance coverage. Carefully read your policy for accurate information about your specific policy or contact your company customer service representative.

Types of Homeowner Policies

Many homeowner policies are grouped according to the type of policy and how comprehensive the covered benefits. The traditional polices are:

  • Homeowner 1
    This is the basic, least expensive policy, and it covers liability, fire and lightening.
  • Homeowner 2
    This the “broad coverage” package, it covers loss from windstorm or hail, theft, explosion, smoke damage from vehicles and aircraft, glass breakage, removal of property endangered by covered peril such as fire, vandalism, malicious mischief, and riot or civil commotion. HO-2 also covers building collapse, freezing of or accidental discharge of water or steam from within plumbing, heating, or air-conditioning, falling objects, weight of snow, ice, or sleet, and rupture or bursting of steam or hot water heating systems. You will find this description on the policy.
  • Homeowner 3
    This policy is called the “special” form. It insures your home and detached structures against loss or damage from any peril except for those specifically excluded in the policy. This is the policy most homeowners purchase.Know what is excluded. It should be clearly stated on your policy. Normally, this coverage is not that much more expensive than the two stripped models.
  • Homeowner 4
    This policy is for renters and it primarily covers liability and contents.

Some companies no longer use the familiar HO series. They offer special policies designed for their clients. Unfortunately, that makes it rather difficult to compare apples to apples.


You can influence your premium by choosing the policy from the list above. The more comprehensive polices cost more. Another way to influence the premium is the deductible you choose. The deductible is the amount you pay for a covered loss before the company pays anything. Naturally, the larger the deductible you select, the less the insurance company will pay, and the cheaper your premium will be. Deductibles are often $500 or $1000. There are higher deductibles and some companies use a percentage of the insured value of the home. For example, a home with a $500,000 insured value with a 2% deductible, translates into $10,000 out of pocket money — up front, for a covered loss. Sometimes you can pay a higher premium and switch to a dollar deductible, such as the previously mentioned $500 or $1000. It is important to find a balance between the money you save on the premium and the bucks you must shell out in case of a loss. The deductible should be an amount you can comfortably pay without mortgaging the kids.

Other Criteria and Consideration

Insurance companies may use your credit rating, the area in which you live, the construction and condition of your home, not to mention its age when determining your premium. An insurance company can turn down your request for coverage. If you home’s replacement cost is much higher than its market value, that could create a problem with some insurance companies. This normally occurs with older, larger homes.


If you have more than one policy with the same insurer you may receive a discount. Also, if you are close to a fire hydrant, have smoke detectors, a security system, dead lock bolts and or a sprinkler system you probably will receive a nice little reduction in premium. Some companies offer discounts to organizations and professional groups to which you may belong. When comparing companies and polices notice the discounts.

Compare, Compare, Compare

You are now prepared to research homeowners insurance and compare the various polices, premiums and deductibles. When you find the perfect (well, almost perfect) policy apply with confidence on line. We value your security. Happy hunting!