Homeowners insurance is not a one-size-fits-all product. Insurance companies offer several standardized policy types designed to meet the needs of different kinds of homes, ownership situations, and risk levels. These policies are commonly referred to as HO forms, and each one provides a different level of coverage.
Understanding the eight main homeowners insurance policies can help homeowners choose the protection that best first their property and lifestyle.
HO-1: Basic Form
The HO-1 policy is the most limited type of homeowners insurance that is rarely offered. It covers the home’s structure against a short list of specific perils such as fire, lightning, windstorms, and theft. Personal property coverage is very limited, and liability coverage is either unavailable or minimal.
HO-2: Broad Form
An HO-2 policy provides broader protection than HO-1 by covering perils, including falling objects, weight of snow or ice, and accidental water damage from plumbing systems. Coverage still applies only to named perils, which means anything not specifically listed is not covered.
HO-3: Special Form
The HO-3 policy is the most common type of homeowners insurance. It covers the home’s structure on an open-peril basis, meaning it protects against all risks except those specifically excluded. Personal belongings are typically covered for named perils. This policy offers a strong balance of coverage and affordability—making it the most popular amongst homeowners.
HO-4: Renters Insurance
The HO-4 policy is designed specifically for renters and not homeowners. It covers personal belongings and provides liability protection but does not cover the structure of the building, which is insured by the landlord. We’re including this in the list because it’s highly recommended that homeowners renting their home should require tenants to hold a renter’s insurance policy.
HO-5: Comprehensive Form
The HO-5 policy offers the highest level of protection for homeowners. Both the dwelling and personal property are covered on an open-peril basis, with higher coverage limits and fewer exclusions. Homeowners with higher-value properties and belongings often select this policy.
HO-6: Condominium Insurance
An HO-6 policy covers personal property, interior walls, flooring, and fixtures, along with liability protection. The condo association's master policy typically covers the building’s exterior and common areas.
HO-7: Mobile Home Insurance
The HO-7 policy is tailored for mobile or manufactured homes. It provides coverage similar to an HO-3 policy but it is specifically designed to address the unique construction and risks associated with mobile homes.
HO-8 Modified Coverage Form
The HO-8 policy is intended for older or historic homes where the cost to rebuild extends the home’s market value. It often pays claims based on actual value rather than replacement cost, making it a more affordable option for unique or aging properties.
Each homeowners insurance policy type serves a specific purpose. Understanding the differences among these eight options, equips you with the knowledge to select a policy that provides appropriate coverage and protection.
