What type of insurance should a homeowner have?

Most lenders will require you to have homeowners insurance, also known as risk insurance and often abbreviated as HOI. This insurance policy covers losses that occur in your home, its contents, the loss of its use (additional living expenses) or the loss of other personal property of the homeowner. A HO-7 insurance policy covers mobile or prefabricated homes, including trailers, sectional homes, recreational vehicles and modular homes. This type of policy covers the structure of your home, your personal belongings, civil liability, additional living expenses and medical payments.

An HO-2 insurance policy is also known as a broad form and covers your home and personal belongings. But before collecting quotes from other companies, ask for a price from insurers you already have a relationship with. Supplemental liability insurance provides additional coverage for bodily injury, property damage and personal injury to third parties, beyond the policy limits described in your main homeowners policy. You may not even be eligible for home insurance based on the number of claims filed recently in the past, Bank notes.

A standard home insurance policy is generally intended for single-family homes, but there are also other types of home insurance policies, each of which targets a specific type of home. You can find these costs on the websites of most construction companies, or you can ask an independent insurance agent to calculate those costs for you. To determine if your HO-2 policy includes liability coverage, contact your insurance company directly. And even after purchasing a policy, investors should, at least once a year, compare the costs of other insurance policies with their own.

Homeowners insurance will cover accidents that occur on your property, so you won't have to pay expensive medical bills or lawsuits. Whether you're buying your first home insurance policy or you want to update your current policy, it's essential to know the basics of home insurance coverage. A burglar alarm monitored by a central station or connected directly to a local police station will help reduce annual premiums for homeowners, perhaps by 5% or more. You should get an idea of how much homeowners insurance costs in your area by researching and getting several quotes.

Not all Nationwide affiliate companies are mutual companies, and not all Nationwide members are insured by an investment company.

Timmy Stango
Timmy Stango

Pop culture geek. Passionate analyst. Bacon junkie. Proud music buff. Avid food specialist.

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