You need HO-3 protection for:
Coverage for your home, belongings, and personal liability
Insures your home against natural disasters and other perils, like theft and fire.
Coverage against unexpected injuries that may occur throughout your lifetime.
A safety net against expensive repairs or replacements.
Because of its multiple levels of protection, lenders will almost always require HO-3 coverage when applying for a mortgage as it protects you and your lender’s financial investment.
Before signing any policy, you should understand the nuances of each policy and the applicable types of coverage you are purchasing. You need to know how each coverage is different to protect your home against every feasible type of damage that may occur.
An HO-3 policy covers two types of property damage—open perils, known as all risks, for your home and detached structures. The second class is named perils which covers your belongings. The open perils coverage covers your home and other structures against any perils except those excluded by the policy. With named perils coverage, they protect your property against 16 perils.
When it comes to what’s protected, there are two types of coverage, HO-3 and H0-1/H0-2. HO-3 offers “all-risk protection”, which covers everything typical of homeowner’s insurance, save for what’s specifically excluded. HO-1/HO-2, however, covers the property for specified perils shown in the policy.
Depending on your provider, you may have the option to add virtual maintenance services or innovative home kits to your policy. This allows for certain discounts under specific stipulations, like if you commit to use green appliances or install protective intelligent home devices in your home.