It doesn’t matter if you own your property or are renting it. You’re going to need some sort of insurance to cover your property – either your personal property (belongings) or the home itself. The type you purchase will depend on your situation.
What Each Policy Covers
Property policies are broken into two distinct portions – Property Section and Liability Section. The property section will vary depending on the type of residence you are living in, but liability section covers your personal liability. It includes coverage for personal liability and coverage for medical payments to others. Personal liability covers damages you may be legally obligated to pay due to an incident that caused property damage or bodily injury to another person. Medical payments to others is more like a good-faith coverage, paying medical expenses caused by you, the insured, to another individual. The coverage limits for each, as well as exclusions, may vary from policy to policy.
Commonly referred to as the HO-4 policy, renters insurance is for individuals who rent any residential property. It may be an apartment, a condo, or a house – but if you are renting you are responsible for insuring your own personal property and liability. There is no coverage for the building or dwelling itself. The policy includes not only coverage for your personal property, but coverage for loss of use if you are unable to live in your dwelling for an extended period of time after a covered loss.
Also known as the HO-6, condo insurance is for people who have purchased a condo unit. The first part of the policy covers the dwelling itself, but only from “the interior walls in.” This means the drywall in your unit, any fixtures like cabinets, your rugs and flooring, and any other “permanent” fixtures are your responsibility. Anything outside of your unit, including common areas, is the responsibility of your homeowners association. After that, you also have personal property, loss of use, and liability coverages as previously discussed.
The HO-3 is the standard, but there are now several different/better options available including the HE-7, HE-7/20, HE-7/21. In general, homeowner policies cover your dwelling (the house itself), other structures (like unattached garages or sheds), personal property, loss of use, and liability.
There are several other types of residential property insurance policies such as Dwelling Fire Policies (1,2,&3), HO-8, as well as mobile home insurance. Every type of policy comes with restrictions and limitations, especially when it comes to replacement cost, sub-limits on certain types of property (like jewelry or firearms), and covered causes of loss. You’ll need to check with your insurance agent to compare the enhancements and restrictions offered by different insurance companies.
Now that you know what policy types are out there, though, you should be able to confidently tell your agent at Tom Needham Insurance Company what you need. Still in doubt? Just ask. We’re here to help!