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.
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.
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.
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.
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.
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
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.
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.
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 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:
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.
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:
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.
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:
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 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.
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 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.
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.
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.
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:
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
Insurance Information Institute. (2022). Facts + Statistics: Homeowners and renters insurance.
Joint Center for Housing Studies of Harvard University. (2018). HOUSING AMERICA'S OLDER ADULTS 2018.