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Homeowners insurance offers protection for homeowners’ belongings and the home itself. There are eight types of homeowners insurance based on the dwelling type: condo, home, mobile home, or new construction. Mobile home insurance is known as an HO-7 homeowners policy.
Unlike car insurance, homeowners insurance is not required by state law. However, if you have a mortgage, your lender will require homeowners insurance to protect the investment. Additionally, mobile home communities may require owners to have mobile home insurance.
What is homeowners insurance?
Homeowners insurance protects the dwelling, your belongings, and offers liability coverage for injuries that happen on your property. If the mailman slips and falls on your footpath, the dog bites a guest, a tree falls on your roof, or the neighbour’s kid injures himself doing a cannonball in your swimming pool, homeowners insurance can protect you.
Named peril vs open peril homeowners policies
There are several types of homeowners policies. However, they all fall within two categories: named peril or open peril. A “named peril policy” covers you for listed events, like a fire, storm, or theft, whereas an “open peril” policy covers just about anything that might happen, unless your policy specifically notes that it’s not covered.
Insurance company Lemonade provides the following example of an open peril: If an apartment flood ruined your computer, and your policy doesn’t specifically say flooding isn’t covered, your insurance company will have to approve your claim, by default.
Here are a few more instances of events that might be considered named peril and open peril:
Named PerilOpen Peril
- Fire or lightning
- Windstorm or hail
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or steam
- Sudden and accidental tearing, cracking, burning, or bulging
- Sudden and accidental damage due to short circuiting
- Volcanic eruption
- Freezing pipes and systems in vacant dwellings
- Damage to foundations or pavements from ice and water weight
- Theft from a dwelling under construction
- Vandalism to vacant dwellings
- Latent defects, corrosion, industrial smoke, pollution
- Settling, wear, and tear
- Pets, other animals, and pests
- Weather conditions that aggravate other excluded causes of loss
- Government and association actions
- Defective construction, design, and maintenance
There are 8 types of homeowners insurance policies
There are eight types of homeowners policies based on the type of home you have. If you have a mortgage, your lender may have a preference for the type of coverage necessary to secure the home loan. Therefore, it is best to talk to your agent and lender to make sure you have proper coverage. Additionally, some condominium associations will have rules in the by-laws about homeowners insurance coverage minimums.
PolicyTypeDwellingLiabilityBelongingsPeril TypeHO-1 Basic* Yes No No Peril HO-2 Broad* Yes No Yes Peril HO-3SpecialYes Yes Yes Open/Peril** HO-4 Comprehensive*** Yes Yes Yes Peril HO-5RentersNo Yes Yes Peril HO-6Condo/Co-op**** Yes Yes Yes Peril HO-7 Mobile homes Yes Yes Yes Open/Peril** HO-8 Older homes Yes Yes Yes Peril
*Most lenders don’t consider this sufficient coverage.
** The structure is “open peril” and belongings are “peril.”
***Typically for brand-new homes only.
***Check with your homeowners association (HOA) first.
What is mobile homeowners insurance?
Mobile homeowners insurance (HO-7) is similar to your standard homeowners policy (HO-3) because it covers your home, your belongings, and liability. Like HO-3 homeowners insurance, mobile homeowners insurance is open peril for the structure and named peril for belongings.
A modular home is not the same as a mobile home. If you have a modular home, you should get a standard HO-3 homeowners insurance policy.
CoverageHO-7 Mobile homeowners insurance Dwelling Yes Belongings Yes Liability Yes Loss of use (additional living expenses) Yes Equipment breakdown Yes High-end electronics and special jewellery Available as add-on if not part of policy Earthquake Available as add-on if not part of policy Sewer/water damage Available as add-on if not part of policy Flood Required in flood zone; most homeowners experience some flood
How much does mobile homeowners insurance cost?
Mobile home insurance can range from $US300 to $US1,000 depending on your location, the age, and condition of your home, according to TrustedChoice. Mobile homes located in coastal areas will have higher premiums.
Mobile homes located in weather-zones or disaster prone areas â€” flood zones, hurricanes, tornadoes, wildfires, mudslides, hail, and earthquakes â€” will have increased premiums because these types of events are not included in basic coverage and will need to be add-on riders.
How to find mobile homeowners insurance
Unlike a standard homeowners (HO-3) insurance policy where you can easily search for quotes online, mobile home insurance quotes are not readily available online. While GEICO offers quotes online through Assurant and Foremost offers online quotes for mobile home insurance, most traditional homeowners insurance companies require you to speak with an agent to get a quote for mobile home policies (see Business Insider’s picks for the best homeowners insurance companies).
Related Content Module: More Personal Finance Coverage
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