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Actual Cash Value
Coverage is limited to a specific amount, regardless of whether the value of the house rises or falls. For example, a $70.000 actual cash value policy would cover only $70,000 in damages, even if the value of the home rises to $100,000.
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Replacement Cost
Policy covers the costs of replacing any damages. For example, a replacement cost policy would cover the cost of replacing a $100,000 home regardless of whether the house rose or fell in value.
- Basic Homeowners Insurance. Known as HO-1, covers damages to your property due to a limited number of causes, such as fire, theft, or vandalism. It is only available in a few states and is the least common policy.
- Broad homeowners insurance. Known as HO-2, covers the same types of damages as HO-1, plus some additional natural cause. It is slightly more expensive than HO-1, but covers damages resulting from ice, snow, and falling objects.
- Standard homeowners insurance. Known as HO-3, is the most common type of homeowner's policy, according to the National Association of Independent Insures. It covers damages resulting from most natural disasters, with the exception of flood and earthquake. Those are covered by separate policies.
- Fair Plan, (Fair Access to Insurance) is the forth type of insurance policy. It is for people who do not qualify for the HO plans. Generally this is for buildings located in crime-ridden or rundown neighborhoods. Plans for condominium owners. Because condominium owners share the cost of public grounds with other members of their condo association, there is a special type of homeowners insurance that covers condominiums, HO-6. This policy covers the areas owned by the individual condo owner. Coverage for the shared property is purchased separately by the condominium association.
- Affordability myth: "I hear renters insurance is too expensive."
For just pocket change a day, our policy can provide affordable basic protection of your personal property, and can protect you in case of a liability lawsuit.
- Landlord myth: "The landlord's insurance covers me."
Your landlord's insurance generally only covers the building where you live – not your personal belongings and your liability.
- Responsibility myth: "I don't need liability insurance."
Your landlord's policy most likely excludes liability for something that occurs in your rented residence. You could be held responsible for injury to another person or damage to another person's property if an incident occurred within your rented residence, or elsewhere. Without liability coverage, your current and future earnings could be at risk. Renters insurance may also provide legal defense costs.
- Ownership myth: "I don't own very much."
Most people's belongings are often worth more than they think. That's one reason why you need renters insurance. However, it's important to know how much you need.
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