Types of Homeowners Insurance Policies

Homeowners insurance is your financial safety net for life’s unexpected twists and turns. It provides coverage for damages to your home, your personal belongings, and liability protection if someone is injured on your property. However, not all policies are created equal—each one is tailored to cover specific needs. That’s where understanding the different types comes in handy.

HO-1 Basic Form

The most basic type of homeowners insurance policy is HO-1. It offers limited coverage and is rarely used today. This policy typically covers 10 perils, including fire, theft, and windstorms. However, it doesn’t cover events like floods or earthquakes, which leaves significant gaps in protection. While it may be less expensive, it’s often not enough for most homeowners.

HO-2 Broad Form

HO-2 policies provide broader coverage than HO-1, insuring your home and belongings against 16 specific perils, such as falling objects, freezing, or electrical damage. While HO-2 is more comprehensive, it still follows a named-peril structure, meaning if a peril isn’t specifically listed, it won’t be covered.

HO-3 Special Form

The most popular type of homeowners insurance policy is HO-3. Why? Because it provides excellent all-around coverage. It insures your home against all perils except those explicitly excluded (like floods and earthquakes). Your belongings, however, are still protected against the 16 named perils under HO-2. Think of HO-3 as the perfect middle ground, offering extensive coverage without breaking the bank.

HO-4 Renters Insurance

While not technically for homeowners, it’s worth mentioning HO-4, also known as renters insurance. Although it doesn’t cover the structure of a home, it provides protection for personal belongings and liability, making it ideal for those renting apartments or houses.

HO-5 Comprehensive Form

If you’re looking for top-tier coverage, HO-5 is the way to go. This policy is similar to HO-3 but offers even more comprehensive protection for both your home and belongings. Under HO-5, both are typically insured against all risks, with fewer limitations on coverage for high-value items. It’s a premium choice, but one that provides unmatched peace of mind.

HO-6 Condo Insurance

For those who own condos, an HO-6 policy is a must-have. This type of insurance covers the interior of your unit (like walls, floors, and ceilings) and your personal belongings. While your condo association may have a master policy, HO-6 ensures you’re protected for anything not covered under their plan.

HO-7 and HO-8 Policies

HO-7 policies are designed for mobile or manufactured homes, offering similar coverage as HO-3 but tailored to these types of structures. HO-8, on the other hand, is tailored for older or historic homes. These homes often exceed the replacement cost, and HO-8 policies account for that by reimbursing based on actual cash value rather than replacement.