Why “basic” homeowners insurance is anything but

Thu Jun 07 2018

A dog sitting on a welcome mat

A lot of homeowners have been conditioned by the health insurance industry to assume that anything more than the absolute minimum amount of insurance will be too expensive. Luckily, the world of homeowners insurance is pretty different from the world of health insurance: Here, “basic” coverage is actually pretty robust.

What does basic homeowners insurance mean?

When we talk about basic home insurance, we’re really referring to HO3 policies. This is the most common type of home insurance, and it covers a wide range of perils that can damage your home, other structures on your property, and even your personal property.

You don’t want to confuse an HO3 policy with an HO1 policy. An HO1 policy is sometimes called the basic form, but the coverage is so limited that few insurance companies offer it.

Here are our five favorite coverages that come with your basic homeowners insurance.

1. Personal liability coverage

It’s common knowledge that homeowners insurance protects the house itself – the bricks, roof, and windows. But even the most basic homeowners policy almost always includes personal liability coverage as well.

Personal liability can help pay for costs that arise when you injure a guest at your home or damage their property. But here’s the really cool part: it can also pay those expenses if you cause that damage at another location.

That’s right: your basic homeowner's personal liability coverage can actually follow you around and keep you protected.

2. Medical expenses coverage

Consider this a special subset of the personal liability protection mentioned above. Most basic home insurance policies include a special portion of coverage dedicated to covering only medical costs associated with injuries your guests sustain at your house (or that you cause people in other places).

The limits for this portion of your coverage typically aren’t too high, but having that money ready to go in the event of a claim can make life easier for everyone involved – and help you ensure that your guests get the medical attention they need.

3. Loss of use insurance

You expect your homeowner's insurance to pay for a new roof if a tree branch falls on your house. But did you know most basic policies will also cover your living expenses if covered damage makes your home uninhabitable?

So if you can’t stay in your house because of covered damage (like a fire), your policy can cover the money you have to pay to live somewhere else. Depending on the circumstances, that might include hotel bills, restaurant meals, and even laundry fees.

4. Damage from appliance-related flooding

Unless it’s happened to you, you probably wouldn’t believe the kind of damage a small leak from a fridge can cause. In some cases, a leak so small you never noticed it can warp your whole floor and damage the ceiling of the story below, too.

The good news is that most basic home insurance policies cover this kind of damage. So even if your entire kitchen and basement need to be torn up, dried out, and reinstalled, you may have the funds you need to get the work done and restore your house to its former glory.

5. Replacement cost property coverage

At Kin, we are big fans of this one. Such big fans, in fact, that we only sell policies with replacement cost property coverage.

Here’s how it works: in the event that your property (furniture, appliances, etc.) is damaged by a covered event, your policy can pay for you to replace it with brand-new equivalent property.

Translation: If your sofa was new 15 years ago and it gets destroyed in a fire, your replacement cost property insurance can pay for a brand-new sofa of similar quality.

The alternative, called actual cash value coverage, only pays enough for you to replace your property with something worth the current value of whatever was damaged. (So you’d get enough money to buy a used 15-year-old sofa.)

Trust us: you want the replacement cost coverage!

Find a basic home insurance policy in minutes

Ready to enjoy the coverage a basic homeowners policy can offer? Take two minutes to apply for insurance, and get an idea of how little it costs to enjoy all these protections (and more!).


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