What Homeowners’ Insurance Covers

If you’ve ever considered buying a home, you’ve likely heard about homeowners’ insurance. This type of insurance is crucial in protecting what is probably your most significant and most expensive asset. In this article, our team at Klotzman Property Damage Law takes a closer look at home insurance.

What Is Homeowners’ Insurance?

Homeowners’ insurance is crucial for protecting your home and other possessions and guarding you against personal liability. It’s a significant investment that protects you from the financial hardships associated with repairing or replacing your home.

While homeowners’ insurance isn’t required to buy a home in Florida, your mortgage lender may ask you to purchase a policy. Each insurance company offers several options for coverage, so it’s crucial to choose a plan that works for you and your family.

Why Is Homeowners’ Insurance Important?

This type of insurance is crucial for several reasons. For one, it saves you from paying for costly repairs by yourself. Houses are expensive, and most homeowners don’t have readily available funds to rebuild their homes.

Homeowners’ insurance also protects more than just your house – it can also cover your personal property. If your valuables are stolen, damaged, or lost, an insurance company will pay to replace or repair them. 

Insurance also protects you from liability. Suppose someone else suffers an injury on your property, leading to medical fees. In that case, they could potentially sue you for damages. Homeowners’ insurance with personal liability coverage will protect you from paying out of pocket for medical bills and legal defense.

What Does Homeowners’ Insurance Cover?

Now that we’ve defined homeowners’ insurance and discussed its importance, we’re ready to look at what it covers. While policies typically offer coverage for your dwelling, other structures on your property, personal property, and liability, there are a variety of policy options.


HO-1 policies, also referred to as basic policy forms, are the most basic form of insurance and offer minimal coverage. This kind only protects your home and personal belongings against ten named perils and solely covers them at their actual cash value. 

HO-1 policies will only cover damage from these perils:

  • Fire or lightning 
  • Windstorm or hail 
  • Explosion
  • Riot or civil commotion
  • Aircraft
  • Vehicles
  • Smoke
  • Vandalism
  • Theft
  • Falling objects

Basic form policies apply to single-family homes but are becoming increasingly rare. While we don’t recommend this type of policy, it’s an important stepping stone in choosing the type of policy you’d like to carry.


HO-2 policies are also called broad form policies. They cover the structure of your home at its replacement cost and your personal property at its actual cash value. This policy also carries coverage for medical payments and additional living expenses. 

It also covers the ten named perils from HO-1 policies, in addition to six more:

  • Weight of ice, snow, or sleet
  • Accidental discharge or overflow of water
  • Sudden and accidental damage to a built-in appliance
  • Sudden and accidental damage from artificially generated electrical currents
  • Freezing
  • Volcanic eruption

Broad form policies offer more coverage and are more common than HO-1 policies.

homeowners’ insurance concept, hands protecting miniature house 


HO-3 policies, also called special form policies, are more extensive than broad forms and are the most common type of homeowners’ insurance. This policy offers all-risks coverage for your home, which means it covers everything except for excluded perils. However, special form policies only protect your personal property from named perils.

Commonly excluded perils can include:

  • Ordinance of law
  • Earth movement (earthquakes and sinkholes)
  • Water damage from flooding
  • Power failure
  • Neglect
  • War
  • Nuclear hazard
  • Intentional loss
  • Government action
  • Mold, fungus, or wet rot
  • Wear and tear
  • Mechanical breakdown
  • Smog, rust, or other corrosion
  • Damage from pollutants
  • Settling, shrinking, bulging, or expanding of your foundation or walls
  • Damage from birds, vermin, insects, or pets

Special form policies cover your home at its replacement cost and your personal property at its actual cash value. These policies also include loss-of-use coverage and protection from liability. 


HO-5 policies are the most comprehensive kind of homeowners’ insurance and are also called comprehensive form policies. While similar to HO-3 policies, comprehensive form policies have a few differences.

An HO-5 policy covers your dwelling and personal property at their replacement cost, provides all-risks coverage for your home and personal belongings, and offers high coverage limits for expensive types of property like jewelry and some electronics. 

We recommend HO-5 policies for high-net-worth properties in high-risk areas.


HO-8 policies, occasionally called modified coverage forms, insure homes that fall short of standard home insurance requirements. Suppose you have an older home with a higher risk of loss but are not interested in upgrading it. In that case, you may benefit from an HO-8 policy.

Modified coverage forms are similar to HO-1 policies and only provide coverage for the ten named perils. Additionally, HO-8 policies only reimburse you for the actual cash value of your home, not the replacement cost.   

Who Needs Homeowners’ Insurance?

If you’re buying a home in Florida, you will likely need to invest in a few different types of insurance – but most importantly, you will need to purchase a homeowners’ insurance plan. Plus, your mortgage lender will likely require it before they approve your loan.

Speak to the Experts

Homeowners’ insurance is essential for many reasons, especially when it comes to protecting you from expensive repair costs. Be sure to choose a plan with the correct coverage for your needs.

If you’re having trouble with your insurance company, we can help you determine your options based on your insurance coverage. We will investigate, negotiate, and litigate your case to get you the results you deserve.

Schedule your free case review today with our Hollywood property damage attorneys. When insurance companies fail, Klotzman Property Damage Law succeeds.

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