Theres More Than One Type Of Home Insurance

Theres More Than One Type Of Home Insurance

For many Americans, buying a home may be the single most expensive purchase they’ll make in their lifetime. It’s not just an investment, it’s the place where you live, maybe even where you raise your family, and so it has value far beyond a monetary price tag.

But if something happens, you’ll want money to help recover or recoup losses. This is where home insurance comes in, which is not legally required to own a home, but if you need a mortgage, many lenders require it before they’ll approve your loan.

However, as you start looking into home insurance, keep in mind that there are three broad categories that they fall into. Here’s a rough introduction to what you can expect.


Also known as “named perils” insurance, this is a type of home insurance is strictly “by the book” in that whatever is in the contract is what’s covered. What this means is if you get insured for fire or storms/tornados, those are the only two things guaranteed to be covered by your insurance.

This means if you get flood damage, you’re out of luck as that wasn’t one of the “named perils” that was on your insurance. Basic insurance has the perk of being simpler, but that simplicity can also come at the cost of less coverage if the policy doesn’t cover a lot of potential threats.


This, as the name suggests, is the complete opposite of basic, and takes a more broad approach to the possible threats to your home. Comprehensive coverage will cover anything except those things that the insurance policy explicitly mentions as not being covered.

In other words, if you experience an “act of God,” such as lightning from a storm hitting a tree and causing that tree to hit your home, you’ll be covered. Even if there’s no specific mention of this incident, comprehensive insurance didn’t specifically exclude it either.

On the other hand, if comprehensive insurance specifically mentions, “does not cover flood damage,” and your home gets hit with a flood, you are again out of luck. It’s clearly stated in the policy what the insurance doesn’t cover. Additional flood insurance is usually available, but it’s a good idea to look into what your state situation is for the threat of flooding.


A broad insurance policy is a mix of basic and comprehensive. Generally speaking, broad insurance acts in different ways, depending on the location of the damage. You will get comprehensive insurance protection when it comes to damage to the property or the home itself.

However, when it comes to belongings on that property, such as valuables, family heirlooms, computers, TVs, and other appliances, that coverage will be basic, and will only cover the specified damage cited in the insurance policy.

If you’re thinking about getting home insurance, but aren’t sure where to start, we can help. Contact Panorama Insurance Agency Inc, and we can walk you through what your options are, and find the policy that best suits your needs.

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