Home insurance comes in different forms and depending on which type of policy you choose your home insurance rates and coverage options will be quite different.
- HO-1: the most basic form of home insurance »
- HO-2: It is often referred to as "broad coverage" »
- HO-3: also referred to as "special" form »
- HO-4: is often called a tenant’s policy »
- HO-6: type of home insurance addressed condominium unit owners »
- HO-8: such policies are specifically designed for owners of old homes »
Home insurance is a very effective financial tool for protecting your most valuable asset. Learn how home insurance can help you protect your house and its contents against different perils.
Home insurance and the right to know
The Brits sometimes have a quaint way of saying things but, when you understand what they mean, it make a lot of sense. They say, “Never buy a pig in a poke”. In the good old days of selling in markets, some farmers used to offer animals in a sack or poke. This was a sight-unseen sale. Buyers were supposed to trust the farmers to put healthy animals into the sack. Needless to say, only the unwise agreed to this strange offer. Moving back home, the insurance industry seems to think you should buy an insurance policy in a poke. A majority of policies are now sold through sites like this with quotes sent out automatically. If you want, you can buy the policy on the basis of the quote without ever seeing the policy. Many people only read their copy of the policy when the need for a claim arises. It came through the mail and sat in its envelope awaiting the day of need. Except, many then find their expectations dashed as it turns out may of the expected headings of damage have been excluded. This has come as very hard news to all those people who have recently suffered in Hurricanes Irene and Lee.
It should be automatic for insurers to give all those who are interested a clear sight of the policy before they buy. Indeed, there’s no reason in principle why all the standard policies and possible additional terms should not be posted online for all to see. When you go to almost all e-commerce sites, the terms of sale are posted on static pages. It’s somewhat depressing you actually have to push insurers into revealing their policies. Most will supply a copy if you ask nicely. Except, it doesn’t necessarily do you any good.
Attorneys are lovely people (at least their spouses no doubt think so) but their talent is to write in an obscure version of English no one without an advanced degree can understand. Now far be it from us to suggest insurers don’t want you to know what you’re buying, but it’s a common reaction among those who do try reading the policies. So, in Trenton, the Senate Majority Leader Barbara Buono has introduced a bill that would force all insurance companies to publish a buyers’ guide written in plain English. No more complicated grammar or long words. Every insurer would be required to get approval from the Insurance Commissioner that the information is supplied in a clear and unambiguous way. The longer term hope is these documents will defuse a lot of the confusion that interferes with the claims process.
If this bill becomes law, the insurer will have to supply a copy of the explanatory material with the quote and when the time for renewal comes around. If the Senator can get this bill through into law, it should restore much of the consumer protections swept away over the last ten years. Home insurance policies do not have to be written in complicated English but, if they are, requiring the insurers to send out an explanation in plain English will help undo the damage. It would be best if similar laws could be rolled out across all states and have all home insurance policies in a single location for comparison shopping.