Understanding Homeowners’ Insurance for First-Time Buyers in League City, TX
As a first-time home buyer, you’re also stepping into the world of homeowners’ insurance for the first time. At ACU Insurance Services, we aim to help our customers in League City, TX, understand the intricacies of homeowners’ insurance. Your insurance agent will present you with various options, and your choice of HO level of insurance will determine the number of perils your policy covers.
Defining a Peril
In insurance terms, perils refer to hazards or mishaps caused by nature or human actions. These can range from natural disasters like hurricanes or earthquakes to human-induced incidents like vandalism or theft. Essentially, a peril represents any adverse event that could damage your house.
Decoding HO Levels
Home insurance covers all types of housing. In the insurance industry, we use HO codes to categorize the type of home covered. For example, a single-family home could be protected under HO-1, HO-2, HO-3, HO-5, or HO-8.
Basic Coverage
Home policies offer varying levels of peril coverage, ranging from 10 perils (named peril minimum coverage) to all-perils coverage. An HO-1 homeowners policy covers ten basic perils that constitute the most common risks. A peril isn’t covered if it is not explicitly named in the policy. Most homeowners won’t have the option to purchase HO-8 as this special form of home insurance is reserved for historical homes and architecturally significant properties. For instance, if you buy a house designed by Frank Lloyd Wright, you’d need HO-8, which provides the same coverage as HO-1.
Mid-Level Coverage
Stepping up a level, HO-2 policies cover 16 common perils, each specifically named in the policy. Most homeowners opt for an HO-3 policy that provides open peril coverage, also known as all-peril coverage in the industry, as it covers every peril except those specifically excluded in the policy.
Comprehensive Coverage
If you want comprehensive coverage, consider an HO-5 policy. It offers open peril coverage and extends the coverage beyond the home’s structure to the homeowners’ personal property.
Get in Touch With Us
You’ll need your home insurance policy to close on your League City, TX, home purchase, so call or email ACU Insurance Services today. Let us help you secure the home coverage you need.
