Types of Homeowners Policies

To be reimbursed for damage to your property, a covered peril (such as fire, theft or
windstorm) must have caused your loss. Which perils your policy covers depends on
the type of policy you buy. The most common types of homeowners policies are listed
below. All of the policy types except the dwelling fire form cover your dwelling and its
contents, as well as personal liability and medical payments.

• The  Dwelling Fire Form covers only your dwelling. It does  not cover yourpersonal property, personal liability or medical payments. It also covers only afew perils. It’s the type of policy your mortgage lender will buy for you if you letyour homeowners policy lapse. It’s also used for vacation homes and when youcan’t find other coverage.
• The Basic Form insures your property against only the list of perils.
• The Modified Coverage Form is for older homes, where the cost to rebuild is greater than the market value. It covers the same set of perils as the Basic Form.
• The Special Form is the most popular of all homeowners forms. It insures your property against all perils, except those the policy specifically names as  not covered. Perils commonly excluded are flood and earthquake. 
• The Tenants Form is for renters. It insures your personal property against all of the perils in the Broad Form. 
• The Condominium Unit Owners Form is for owner-occupants of condominium units. It insures your personal property and your walls, floors and ceiling against all of the perils in the Broad Form.

There are other types of insurance for other types of residences. If you own a
townhouse, you may insure it through either an individual homeowners policy or an
association master policy. If you live in a mobile home that has wheels and doesn’t rest
on blocks or a permanent foundation, in most states you’ll buy a form of automobile
insurance. This insurance offers far less coverage than homeowners policies. If your
home is on land used for farming or raising livestock, ask about a farmowners policy.