8 Types of Home Insurance Policies
Whether you’ve bought your first home or your fourth, home insurance policies can be confusing and exhausting to shop for. There is no “one-size fits all” when it comes to home insurance coverage, and you want to be sure to get the most comprehensive and appropriate policy for your home, without paying more for things you don’t need. To help get you started, it’s wise to become familiar with the 8 different types of home insurance policies.
1. HO-1 (Limited Coverage)
This policy isn’t popular because there are other options that provide much more protection for a comparable price. In many cases, this policy is not recommended or available, as many mortgage companies do not consider it to be sufficient coverage. Under standard policies, there are 16 perils that are typically covered. However, this policy covers just 10:
Damage from vehicles
Damage from aircraft
Riots and civil commotion
2. HO-2 (Named Peril)
Otherwise known as the “named peril” policy, the HO-2 covers 16 perils as well as your belongings and some personal liability. Named-peril policies will only protect you and your home from the perils that are explicitly stated in your policy, and any others will not be covered. In addition the perils listed in HO-1, 6 others are included:
Weight of ice/snow/sleet
Freezing of systems (ie. AC or heating)
Accidental tears, cracking, burning, or bulging of pipes and other systems
Accidental overflow/discharge of water/stream
Accidental damage from artificially generated electrical currents
3. HO-3 (Special)
As the most popular and most common choice for homeowners, this policy covers all perils except for ones that are specifically excluded (like earthquakes and floods). This policy also offers coverage for your garage and deck, your belongings, and personal liability in case someone is injured on your property or you damage their property.
4. HO-4 (Renter)
If you do not own but are renting a home, this is your policy. The renter’s policy coverage is limited to belonging and personal liability. It may also cover living expenses if you need to stay elsewhere while the property/structure is being repair or renovated. Your landlord or homeowner will have a separate insurance policy on that actual structure.
5. HO-5 (Comprehensive)
Considered a broader, bulked up version of the HO-3 policy, the HO-5 covers everything the HO-3 covers, with the added bonus of your belongings being covered even with causes that are not specifically excluded. However, there are a few common perils that are typically excluded:
Earthquakes, landslides, mudslides
Neglect/deterioration/ general wear-and-tear
War, government action, and nuclear hazards
6. HO-6 (Condo/Co-op)
While the building itself will have insurance coverage, purchased by the homeowner’s association, this policy further covers condo owners. Coverage includes belongings, personal liability, and structural elements you specifically own (walls, floors, ceilings of the unit).
7. HO-7 (Mobile Home)
The HO-7 form covers everything in the HO-3 form, but is specifically for mobile or manufactured homes.
8. HO-8 (Older Home)
Although this policy may not be available for all older homes, it is designed to cover most cases of older structures (especially historic homes and registered landmarks). It essentially provides the same coverage as the HO-3, but with adjustments/exceptions that are common concerns of older homes. This policy will typically reimburse the homeowner for damages on actual cash value (ie. replacement cost minus depreciation).
No matter which form you may need, it’s always smart to review with your insurance representative, especially with any specific incidents which may or may not be covered according to your policy.