Are They All The Same? Comparing Insurance Offerings From Different Providers

16 June 2015
 Categories: Insurance, Blog

It seems like different insurance companies are offering unique, branded home insurance options. It may interest you to know many of those offering aren't so different from each other at all. They may have different names, but really, they're usually just different names for the same thing:

ISO Standard Forms

To figure it all out, you need to understand what home insurance offerings usually consist of. Most home insurance policies typically use the ISO standards as a baseline. Insurance companies use these standard packages (forms) to create their offerings. The difference between the packages is the number and types of "perils" the policy covers.

For example, the HO1 (basic form) is the most baseline policy available to homeowners. It's not in widespread use too much these days because it's very narrow. It covers eleven named perils:

  1. Damage caused by fire or lightning
  2. Damage caused by windstorm or hail
  3. Damage caused by explosions
  4. Damage from riots or civil unrest
  5. Damage from aircraft
  6. Damage from vehicles
  7. Damage from smoke
  8. Damage caused by vandalism or malicious behavior
  9. Damage from and items lost due to theft
  10. Damage caused by breaking glass
  11. Damage caused by volcanic eruptions

Some insurance companies may add "falling objects" as a baseline peril as well. Each successive form offers something in addition to the baseline. For example, the HO2 adds six more named perils.

The important forms for most homeowners are the HO3 and HO5 policy forms. Keep in mind insurance carriers do not have to follow these forms to the letter. These days, HO3 is the most popular, and HO5 is often offered as an "upgrade."

What's In a Name?

Also, many insurance carriers will allow you to add some additional protection to the base policy. However, if you know your quote consists of the things named in the HO3 form, then you can easily compare it with other quotes to figure out which will work best for you.

Often, the only difference between one company's "Standard Plus" policy and another's "Upper Tier" packages is the name. They're both likely just versions of an HO5 package.

What This Means for You

This should show you that no matter how enthusiastic an insurance company is about their offerings, there's a chance it's almost the same as another company's. Knowing this gives you a lot of power over how you choose your home insurance.

This should also show you that independent insurance companies and brokers can offer you ISO plans as good as or better than the ones offered by the branded companies. Sometimes it's the branding that adds to the price in your quote and not the coverage itself. To learn more, contact a company like East Tennessee Mutual Insurance.