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Home Insurance for Senior Citizens

A Guide to Home Insurance for Older Adults

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Whether you own or rent a home, home insurance is a crucial part of keeping your house and belongings protected. It's important for seniors to have the right home insurance policy so you don't have to dip into your retirement savings in events where your house is damaged.

By choosing the right home insurance policy for your needs, you can get great coverage for your home and rest easy. In this guide to home insurance, we'll go over coverage recommendations, home insurance costs, discounts, types of insurance policies, and ways to choose the best policy for your needs.

What Does Home Insurance Cover?

Person with list of what home insurance covers

Home insurance typically offers five different types of coverage. By knowing what each aspect covers, you can choose the coverages that best suit your needs and home.

  • Dwelling: Covers damage to your home and structures attached to it, like a porch. This coverage usually provides enough to restore your home if it is damaged. Make sure your policy limits cover your home: If you have home modifications like a stair lift or wheelchair ramp, let your insurance agent know to see if you need to increase coverage.
  • Structure: Provides coverage for stand-alone structures like fences, detached garages, and gazebos.
  • Additional living expenses: Covers any costs if you're temporarily unable to live in your home because of a loss covered by your insurance.
  • Personal belongings: Covers the amount to repair or replace your personal items if they're stolen or damaged.
  • Liability: Covers the cost of any injuries or property damage, unintentionally or from neglect.

There are instances where your home insurance may cost more, including having a home in need of major repairs or living in a location prone to natural disasters. If you have modifications like a wheelchair ramp or stairwell, those will also be covered through your policy.

Typical Coverage Limits

Each part of a home insurance policy offers a certain amount of money to cover your home in event of damage. Below are the typical coverage limits for each aspect of a home insurance policy.

  • Dwelling coverage: Usually covers the amount needed to rebuild your home if it were completely damaged in a listed event, like theft, vandalism, or fire damage.
  • Structures: Covers 10 percent of the total amount of the dwelling coverage.
  • Additional living expenses: Includes up to 12 months of daily living costs if your home needs to be rebuilt in the event of a covered loss listed in your policy, like a fire or windstorm.
  • Personal belongings: Covers between 50 and 80 percent of dwelling amount, and can increase if needed.
  • Liability: Averages $100,000 and can increase as needed. This number can vary depending on the insurance company.

Does Home Insurance Cost More for Seniors?

Across the nation, the average cost of home insurance is $1,854 per year. Home insurance policies aren’t necessarily more expensive for seniors, as other factors matter much more in determining the cost.

Below are major factors related to your house that affect the cost of your home insurance policy.

  • Location: If you live in a location prone to natural disasters or where homes cost more, you're likely to pay more for home insurance.
  • Price: Homes that cost more also come with pricier policies, as they're also more expensive to repair or rebuild.
  • Age: Older homes may cost more to insure since they are usually made of materials or have features that are more expensive to restore.
  • Number of claims: If you've filed a claim for your home insurance before, your policy will cost more because the insurance company assumes it's likely to happen again.

Did You Know: According to the Insurance Information Institute, about 1 in 20 insured homes has a claim each year, and most claims are tied to property damage.1

Home Insurance Discounts for Seniors

As you search for a home insurance policy, be on the lookout for discounts. There are many ways to get discounts on your policy, and you can take advantage of multiple discounts at once.

Here are some home insurance discounts you may be eligible for.

  • Senior discounts: Many home insurance companies give discounts to seniors, especially if they're retired. Since older adults tend to be at home more often, there's a smaller chance of break-ins happening, which is why many companies offer discounts. AARP also offers home insurance through The Hartford at a discounted rate, so you can save if you're an AARP member.
  • Bundling home and auto insurance: Most insurance companies offer a 5 to 25 percent discount for bundling home and auto insurance. It means that you can save on both home and auto insurance at the same time.
  • Loyalty discounts: If you're with an insurance company for about 10 years or more, you can usually earn a loyalty discount.
  • Home improvements: You can save on your insurance rate with upgrades to your home that increase its security and safety, like adding a home security system or replacing an older roof.

You can also reach out to home insurance companies to ask if there are other special discounts available.

Did You Know: Seniors can save on more than just home insurance. Check out our senior discount guide to enjoy them and save.

Types of Home Insurance Policies

Magnifying glass over image of a house
When it comes to home insurance policies, there are eight types: HO-1 through HO-8. Here's what you need to know about each one.

HO-1

HO-1 is the most basic form of homeowners insurance and covers the actual cash value of your home. HO-1 policies give so little coverage that many insurance companies don't offer them anymore.

HO-1 policies only give coverage for damage to your home in these instances:

  • Fire/lightning
  • Explosions
  • Riots or civil commotions
  • Aircrafts
  • Vehicles
  • Smoke
  • Vandalism
  • Theft
  • Volcanic eruptions

The HO-1 policy is not recommended for seniors. Under this policy, you won't have protection if some common events happen, like falling objects causing damage to your home.

HO-2

Known also as broad form homeowners insurance, this type of policy usually provides coverage for your home at its replacement cost. Additionally, it covers your personal property at actual cash value.

Along with everything covered by an HO-1 policy, an HO-2 policy covers damage from:

  • Falling objects
  • Freezing
  • Cracking or bulging from an accidental event
  • Unintended discharge from a generated electric current, like a power surge
  • The weight of ice and snow on a home
  • The unintended overflow of water or steam

While more popular than HO-1 policies, these still have limited coverage. The HO-2 policy may not be the best choice for some older adults, as it likely won't provide enough coverage to give you the protection your home needs.

HO-3

The most popular kind of insurance coverage, an HO-3 policy covers homes at replacement cost. It also covers personal property up to its actual cash value. Additionally, it covers your home in all instances except events listed in your policy.

Here are some events that are usually excluded from an HO-3 policy:

  • Floods
  • Earthquakes
  • Landslides and mudslides
  • Sinkholes
  • Neglect
  • Nuclear accidents

This policy is recommended for most older homeowners. As long as your home is sturdy and doesn't need major repairs, an HO-3 policy may be right for you.

HO-4

HO-4 is usually known as renters insurance and is for those who are leasing or renting their own home, condominium, or apartment. It's similar to an HO-3 because it covers your personal property at replacement cost and protection under the same events, but it is for renters instead of homeowners. HO-4 policies also provide for your living expenses if the home you're renting is unlivable because of damage from a covered event, like a fire. An HO-4 is highly recommended for seniors who are leasing or renting their home.

HO-5

Known as a comprehensive policy, HO-5 insurance gives the most coverage to single-family homes. It's like an HO-3, with some additional coverage. Your home and personal belongings are covered at replacement cost. HO-5 policies also cover the cost of your personal belongings under all the same events that your home is covered for. It also includes higher coverage limits for specific kinds of personal property, like art, jewelry, and electronics.

HO-5 insurance is recommended for older adults who have personal belongings that are extremely valuable. It's also a good option if you prefer to have as much protection as possible. Just know this policy will likely cost more.

HO-6

HO-6 is also referred to as condo insurance and provides coverage for people who live in a condominium or co-op. The amount of coverage you'll need under an HO-6 policy depends on what is already covered under your homeowners association (HOA) insurance.

With this type of insurance, you'll most likely need to have dwelling coverage that covers any upgrades you've made to your condo. It also comes with personal property, personal liability, and loss of use coverage.

HO-7

Similar to an HO-3 policy, HO-7 insurance has many of the same coverages but for mobile homes. The mobile homes covered with this policy includes trailers, sectional homes, modular homes, and RV's.

HO-8

An HO-8 policy is for homes that don't match up to the insurer standards needed for other kinds of home insurance. It's for older homes that are more likely to be damaged and undergo loss. These homes may have aluminum wiring, dated plumbing systems, or an unstable roof. If you're not planning to make upgrades to qualify for a standard HO-3 policy, then you may be eligible for an HO-8 policy.

Did You Know: Seniors make up a large percentage of homeowners: Sixty-three percent of U.S. homeowners are at least age 50, while 31 percent are at least age 65.2

While HO-8 policies are pricier, they're recommended for seniors who want to keep their home exactly the way it was built. If you have a home that's been passed down for generations and  want to preserve it, an HO-8 policy is ideal.

Tips for Choosing the Best Home Insurance Policy for Seniors

There are several different options for home insurance, so how do you choose the right policy for your needs? Here are some considerations to help older adults find the best home insurance policy:

  1. Take advantage of senior citizen discounts. Many insurance companies offer discounts on policies for seniors. Shop around and see which insurers can provide you with a discount. You can also qualify for benefits and discounts towards your policy if you're an AARP member since some insurers are affiliated with the organization.
  2. Let your home insurance agent or company know about any home modifications. When looking for a policy, take into account changes you've made to your home. This includes stair lifts and mobility ramps. It's important to add these as part of your insured property so you're fully covered.
  3. Compare provider prices to get the best price for your needs. Get quotes from multiple companies to see which price is the most affordable for you. Chances are, you'll be able to find similar policies and get the best rate from comparison shopping.
  4. Consult with a licensed insurance agent for help finding the right policy. You can choose to work with an agent from a specific company who can tailor a policy to your needs. If you're not sure which company to choose, an independent agent can help you find the best quotes from different companies that match your preferences.
  5. Consider your budget. You can pay less for your home insurance policy if you have the savings to pay a higher deductible. The deductible is how much you pay out of pocket in the event of loss or damage to your home. It all depends on what you can afford in the short and long term, so choose according to what is best for your finances.
Written By

Jeff Hoyt

Editor in Chief

Since graduating from Harvard with an honors degree in Statistics, Jeff has been creating content in print, online, and on television. Much of his work has been dedicated to informing seniors on how to live better lives. As Editor-in-Chief of the personal… Learn More About Jeff Hoyt

Citations
  1. Insurance Information Institute. (2022). Facts + Statistics: Homeowners and renters insurance.

  2. Joint Center for Housing Studies of Harvard University. (2018). ​​HOUSING AMERICA'S OLDER ADULTS 2018.