Types of Homeowners Insurance Policies (2024)

FAQs

What are the three main types of homeowners insurance? ›

Homeowners insurance policies generally cover destruction and damage to a residence's interior and exterior, the loss or theft of possessions, and personal liability for harm to others. Three basic levels of coverage exist: actual cash value, replacement cost, and extended replacement cost/value.

The most common type of homeowners insurance policy is the standard HO-3 Special Form policy. HO-5 policies offer the broadest coverage of all policy types. Open peril coverage means losses are covered unless specifically excluded, while named peril coverage means only named loss types are covered.

What's the difference between HO3 and HO6? The main difference between an HO3 policy for a single-family home and an HO6 condo insurance policy is that while an HO3 covers the physical structure of your home itself, an HO6 policy only covers what's inside the walls of your condo.

The difference between HO-8 and HO-3 insurance policy types is the way in which perils are covered. In an HO-8 policy, there is only coverage for 10 named perils, while an HO-3 policy provides coverage for all perils except listed exclusions.

State Farm is the cheapest home insurance provider in 22% of states and Allstate is the cheapest provider in 18% of states. Use the map below to see which homeowners insurance provider offers the cheapest coverage in your state.

HO-3 and HO-5 policies differ in how they cover your personal belongings. Both HO-3s and HO-5s exclude certain types of damage, such as flooding and earthquakes, from coverage. HO-5s are generally more expensive, as they provide broader financial protection.

Some common HO3 policy exclusions are:

Earth movement, such as an earthquake, sinkhole, and mudflow. Water damage from flood, sewer backup, or water seeping in through the foundation. Demolition of your home required by law to bring it to code. Seizure or demolition by a government agency or public authority.

A typical HO-6 policy covers the structure of your unit, your belongings, additional living expenses, liability, and loss assessments issued by your condo association. Condo insurance does not cover damage caused by flooding, earthquakes, or normal wear and tear.

HO-3 insurance is the most common type of home insurance policy. Standard HO-3 policies provide coverage for your home's structure, contents, liability, medical payments and additional living expenses.

What does h03 mean in insurance? ›

An HO3 policy is insurance lingo for a basic homeowners insurance policy. It's essentially just a contract between you and your insurer. You agree to pay a monthly fee (your premium) and in return, they can have your back when things don't go your way.

HO-3 coverage — also known as a special form homeowners insurance policy — is an open peril policy that covers the physical structure of your home against all perils (a cause of loss) except for those specifically excluded listed on your policy.

It pays to repair, replace, or rebuild your home's structure after a covered peril. This could include fire, theft, vandalism, or a weather event such as lightning, wind, or hail. It could also cover damage from external forces like a falling tree branch.

HOB: Hybrid Policy

It combines an open perils policy for your home's structure with a named perils policy for your home's contents and excludes basically the same perils. The main difference between the HO3 and HOB boils down to water damage protection. HOB provides this point of coverage, while HO-3 does not.

An HO-2 policy puts The burden of proof is yours to prove that your loss was caused by one of the named perils. The HO-3, on the other hand, is what is called an "open" perils policy. Everything is covered except what is specifically excluded. For example - earth movement, flood, nuclear hazard, and war are excluded.

The HE7/21 covers up to $20,000 in damage automatically while the HO3 has no coverage built into the policy so you have to pay an additional fee to have this coverage. Everyone knows you have home insurance to cover your home but people often forget the homeowners policy covers you for liability too.