Whether you’re buying your first home and need homeowners insurance, or you’ve had home insurance for years but haven’t put much thought into it, you may find ways to save money by understanding what you are buying. In addition, by understanding the ins-and-outs of homeowner’s insurance you can be sure you have appropriate coverage for your situation.

In this article we’ll give you some of the basics of what you need to know when buying homeowners insurance.

Make Sure You’re Getting Enough Coverage.

The most important part of homeowners insurance is understanding the level of coverage you are buying. You want to avoid paying for more than you need. There are some common levels of coverage that you’ll see, and one of these may apply specifically to your situation. Here are a few of the most common levels of coverage.

HO-2 – This is a broad policy that protects against the 16 most-often covered perils.

HO-3 – An even broader policy, the HO-3 provides coverage against all perils except perils that you have specifically excluded in the policy.

HO-5 – This is a premium policy that is often used to protect newer or well-maintained homes. This type of policy also covers all perils, except those excluded by the policy.

HO-6 – A very common policy level, this type of coverage is for co-ops and condominiums. HO-6 includes coverage for personal property, liability, and the owner’s unit.

HO–7 – An H0-7 is very similar to an HO-6, but covers mobile homes.

HO-8 – HO-8 policies are for older homes and provide coverage to a HO-2 policy. HO-8 policies only cover cash value.

Home Insurance Terms

There are also some common terms you should be familiar with when buying homeowners insurance.

Deductible – A deductible is the amount you must pay before your insurance begins to pay on a claim; the higher the deductible, the lower your annual premium.

Liability Coverage – Liability will pay medical or legal bills if someone is hurt on your property.

Personal Property – Personal property refers to your belongings or the contents of your home, such as furniture, electronics and clothing.

Premium – This is the cost of your home insurance and is usually paid annually or monthly.

Riders – Riders are mini-policies you can include on your overall insurance policy to cover specific items. For instance, jewelry, antiques and artwork are sometimes covered under their own rider. Some policyholders may choose additional riders for items that are part of the home and expensive to replace, such as heating, ventilation and air-conditioning systems.

It is Important to Shop Around

The best thing you can do when buying homeowners insurance is to make sure you have the right coverage at the right price is to shop around.  InsuranceWay is your place to start. Fill out our simple form now, and you can begin to compare coverage and price. And don’t forget to read those insurance company reviews!