Do cash buyers need HO-1, HO-2, or HO-3 home insurance?

Can I get a comparison of HO-1, 2, and HO-3 insurance policies? I am buying a home with cash and don't need the traditional insurance coverage.

The main difference between HO-1, HO-2, and HO-3 policies is the number of "perils" (events like fire, wind, or theft) that the insurance company will cover. Since you are buying your home with cash, you aren't forced by a lender to pick a specific plan, but choosing the right home insurance policy type is still the best way to protect your investment.

Here is a quick look at your choices:

• HO-1 (Basic Form): This is a "bare-bones" policy. It only covers about 10 specific events, like fire or lightning. It usually doesn't cover your belongings or personal liability, leaving you at risk if someone is injured on your property.
• HO-2 (Broad Form): This covers a few more events than an HO-1, but it is still limited. If a disaster happens that isn't specifically named in the policy, you have to pay for the repairs yourself.
• HO-3 (Special Form): This is the industry standard. It covers your home for everything unless the policy specifically excludes it. It’s the most popular choice because it offers the most comprehensive coverage for your dwelling and your stuff.

Even without a mortgage, we recommend an HO-3 because Jacksonville's high-risk market makes broader protection essential. In Florida, you’ll likely deal with separate hurricane deductibles and should consider a wind mitigation inspection to lower your costs. Because standard policies don't cover rising water, a separate flood insurance policy is also a smart move for coastal areas. You can compare home insurance quotes and see local rates in our Florida Homeowners Insurance Guide.