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Types of Home Damage and Policy Coverage

Protect your biggest investment with the right insurance coverage. At Encore Insurance, we help Michigan homeowners find and secure insurance policies that provide peace of mind at an affordable price.

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In most cases, homeowners who are financing their homes will have to acquire insurance. Even if you’re not legally required to get insurance, it’s highly recommended to have home insurance for accidental damages. You never know what can happen in life, and being confronted with fire, theft, vandalism, or another disaster can wreak havoc on your finances.

Understanding the various policy coverage options and what types of home damages can trigger insurance to kick in can help narrow down your choices as you compare various policies.

Types of Homeowner’s Insurance Policies

Home insurance coverage falls into several categories, including these five:  

Broad (HO-2): Named Peril Policy

This insurance covers only the threats to a home that are specifically outlined in the policy. Though the list is long, if anything that’s not on the list occurs, you won’t be covered. The exact types of home damage may vary between policies, but will usually include 16 common perils.

  1. Aircraft damage
  2. Hail and windstorm
  3. Damage from electrical currents
  4. Riots
  5. Damage from snow, ice, or sleet
  6. Smoke damage
  7. Damage from vehicles
  8. Theft
  9. Explosions
  10. Vandalism
  11. Falling objects
  12. Volcanoes
  13. Fire or lightning
  14. Water damage (not caused by flood)
  15. Frozen pipes
  16. Water heater incidents

All Risk (HO-3): Comprehensive

This policy tends to be the most common because it’s less restrictive on homeowners. Instead of covering only what’s listed, this policy covers everything except what’s specifically excluded. Here, the insurance company will have to prove that your damage or loss was caused by something on the exclusion list.

Renters (HO-4): Personal Property

Even if you don’t own your home, you may still want home insurance. Renters often decide to get insurance coverage for their personal belongings. If a renter’s personal property is stolen via an act of theft, or it’s damaged or destroyed due to an incident covered in the policy, the insured can get the funds to replace the items that were lost.

Condominium (HO-6): Personal Property and Dwelling

Owning a unit in a condominium complex means that the condominium association will have coverage for the building structure and common areas. However, the homeowner may still need a separate policy to cover personal property, the interior elements of the condo, and premises liability.


There are also policies that cater to homeowners who don’t fit neatly into any of the above molds. If you have a mobile home, a farm, or a ranch, you may need a different type of policy.

Coverage Options

Policy coverage is divided into seven different categories, labeled A through G. Though adding coverage may make the price of coverage rise, it’s important to weigh the various risk and benefit factors associated with each.

  • A: Dwelling
  • B: Detached Structures
  • C: Personal Property
  • D: Additional Living Expenses
  • E: Liability
  • F: Medical Payments
  • G: Property of Others

Repair vs. Replacement Costs

One of the biggest decisions you’ll make when choosing accidental damage home insurance is whether you want to be reimbursed for repair costs or replacement costs.

Often, the price difference between these two options is minimal, but the effect on coverage in the event of having to file a claim can be significant.

A repair cost policy, also called a market value policy, means that you’ll receive the amount of money it would take to repair or replace an item or structure to the condition it was in at the time of the event. The amount is reduced for factors like age and depreciation, so you’ll receive less than what it would cost to replace an item with something that’s brand new.

By contrast, a replacement cost policy provides you with insurance that allows you to replace your items and building to their original or “new” condition. There are methods that we recommend to renters and homeowners to value their items and determine which policy is appropriate and how much coverage they need.

Determine the Best Policy Coverage for Your Needs

At Encore Insurance Group, our goal is to provide Michigan residents with the insurance they need to protect their homes from the inside out. Because we’re headquartered in Michigan, we’ve developed relationships with insurance companies across the state to continue providing our customers with the best experience possible.

Contact us to discuss your policy coverage options at (248) 466-0200 or contact us online.