The main reason to obtain homeowners insurance is to protect your home from financial risk in the event of a loss. You might be wondering how to purchase home insurance coverage. Purchasing home insurance is not a difficult process; it requires researching the different options available in order to make a uniform decision.

There are three types of home insurance coverage available HO-1, HO-2 and HO-3. Coverage is based on the type of risk involve and the home structure. It is important that you understand each type in order to select the appropriate coverage.

HO-1 policy is basic homeowner’s coverage which provides protection against fire, theft, hail, lightning and more. This type of coverage is not available in all states and is difficult to find.
HO-2 covers the same type of damage as HO-1. It protects against damage cause by natural disasters such as wind, rain, and hail. Protection for theft, riot and vandalism are also covered. Winter related storms such as snow and ice which cause roof collapse or burst pipes are usually covered.

HO-3 is normally referred to as all risk or open peril insurance, this type of coverage protects your home against damage or loss. It covers all types of perils with the exception of flood, earthquake, and nuclear accident. Personal property is not covered under HO-1 and HO-2, but is usually covered under this plan up to a maximum amount. This type of policy usually covers loss of use which pays for living expenses while your home is being rebuilt. The insurance document will list any exclusion so it is imperative that you read and understand the policy.

Before you purchase any coverage, it is advisable to compare at least three insurance companies. You can compare these insurance companies online. You can also seek references from family, friends and coworkers. It is a good idea to check the insurance company standing with the State Department of Insurance or Better Business Bureau to see if they have any complaints. A.M. Best (www.ambest.com) provides rating on insurance company’s financial strength so it’s a good idea to review ranking prior to purchasing coverage. You are insuring one of the most important financial assets, and you want to make sure the company selected has the financial resources to pay any claims you may have.