Your home insurance covers you from financial loss when specific perils affect your home. Perils typically include events such as hurricanes or earthquakes. Home insurance offers five different levels of peril coverage – HO-1, HO-2, HO-3, HO-5, and HO-8. Read this blog from Dern & Company to determine which level of perils coverage you need for your Milwaukee, WI, home.

Why Have So Many Levels of Coverage?

The insurance industry designed homeowner’s insurance to serve the U.S. population as a whole, hence the five levels of perils coverage. The level of coverage a person needs for their home depends on the location of the house and the typical natural hazards affecting the area. Let’s consider how the five levels differ.

Differences Between Levels of Perils Coverage

The bare bones coverage provided by HO-1 protects from financial loss due to 10 specific perils named in the policy. In the insurance industry, we call this named peril coverage. HO-2 policies also contain named peril coverage but cover 15 perils. HO-8 policies cover the same perils as an HO-1 policy, but only owners of historical homes or architecturally significant homes can purchase them.

Most financial lenders require HO-3 policies before they extend a mortgage to an individual. An HO-3 policy covers most perils and doesn’t limit which homeowners can purchase it.

Insurance companies offer HO-5 policies for homeowners who want comprehensive perils coverage. In the industry, we refer to this as all-perils coverage. If you purchase an HO-5 policy, your home insurance covers anything that could happen to your house.

Upgrade Your Home Policy Today

Do you have less than all-perils coverage? Don’t put your home at risk! Contact Dern & Company today to upgrade your Milwaukee, WI, home coverage.