Definitions of Homeowners Insurance Policies 

 

HO-1: Basic Form Homeowners Insurance

An HO-1 policy provides the most limited form of homeowners’ coverage. It protects the
structure of your home and certain attached or detached structures, such as a garage, fence, or
deck, against a small list of named perils. Personal belongings and liability coverage are not
included.
Common covered perils include:
• Aircraft or vehicle damage
• Explosion
• Fire
• Hail
• Lightning
• Riots or civil commotion
• Smoke
• Theft
• Vandalism
• Volcanic activity
• Windstorms
Because HO-1 policies offer very limited protection, they have become less common, and most
mortgage lenders no longer accept them. The absence of liability coverage also increases
personal financial risk if someone is injured on your property.

HO-2: Broad Form Homeowners Insurance

An HO-2, or broad form policy, expands on HO-1 coverage. It insures your home’s structure,
your personal property, and provides liability protection. It is still a named-peril policy, but the
list of covered risks is longer.
Additional covered perils may include:
• Artificial electrical current
• Pipe cracking or damage
• Falling objects
• Freezing
• Water or steam overflow
• Weight of snow or ice
Coverage specifics vary by insurer, but HO-2 policies offer a more robust level of protection than
basic HO-1 plans.

HO-3: Special Form Homeowners Insurance

HO-3 insurance is the most common type of homeowners policy. It provides comprehensive
protection for your home (dwelling), personal belongings, and liability coverage for you and
your family.
Key features include:
• Open-peril coverage for the dwelling: The home is protected against any peril not
specifically excluded.
• Named-peril coverage for personal property: Belongings are covered only for the risks listed
in the policy.
Common exclusions include earthquakes, floods, mold, sewer backups, and ordinance or law
costs, among others. Homeowners often purchase additional coverage—such as flood,
earthquake, sewer backup, or ordinance coverage—to fill these gaps.

HO-4: Renters Insurance 

HO-4 policies are designed for renters. Since tenants don’t own the structure, building coverage
isn’t included. Instead, the policy insures the renter’s personal belongings and provides liability
protection.
Renters insurance typically includes named-peril coverage for events such as:
• Aircraft or vehicle damage
• Explosion
• Falling objects
• Fire
• Freezing
• Hail
• Lightning
• HVAC or plumbing overflow
• Riots or civil commotion
• Smoke
• Theft or vandalism
• Weight of snow or ice
• Windstorms
HO-4 policies also often cover additional living expenses if the rental unit becomes
uninhabitable after a covered loss.

HO-5: Comprehensive Form Homeowners Insurance

HO-5 policies provide broader protection than HO-3. They offer open-peril coverage for both
the home and personal property, meaning everything is covered except for specifically listed
exclusions.
HO-5 policy traits include:
• Higher coverage limits
• More comprehensive personal property protection
• Often limited to newer homes or certain property types
Exclusions still typically include earthquakes, floods, mold, and nuclear damage.

HO-6: Condo Insurance

HO-6 policies are designed for condominium or co-op unit owners. Since the condo association’s
master policy covers shared areas, HO-6 coverage focuses on:
• Interior structural elements the unit owner is responsible for
• Personal belongings
• Liability protection
Like many other forms, HO-6 policies use named-peril coverage for personal property. Common
exclusions include mold, earthquakes, and sewer backups. Coverage only applies to areas where
the condo owner has an insurable interest, so it’s essential to review the building’s master policy
to avoid gaps or duplication.

HO-7: Mobile Home Insurance

HO-7 insurance is similar to an HO-3 policy but tailored for mobile or manufactured homes,
including mobile homes, trailers, and RVs used as residences.
Coverage includes:
• Open-peril protection for the structure
• Named-peril protection for personal property
Typical personal property coverage includes loss from fire, hail, windstorms, theft, vandalism,
and vehicle or aircraft damage.

HO-8: Older or Historic Home Insurance

HO-8 insurance is designed for older or historic properties where restoration costs exceed market
value. It provides actual cash value coverage for the dwelling and personal property and
protects against named perils.
These policies may also offer liability protection for covered injuries occurring on the property.

Additional Insurance Policy Options
If none of the standard HO policies fit your situation, other specialty options may help:
• DP3 Insurance: A landlord-focused version of HO-3 for rented homes.
• Personal Umbrella Policy: Adds extra liability protection beyond standard policy limits.
• Scheduled Personal Property Coverage: Increases limits for high-value items such as jewelry
or electronics.
• Short-Term Home Insurance: Covers vacation properties with multiple short-term renters.
• Vacant Home Insurance: Provides protection for unoccupied homes more vulnerable to theft
or damage.

Three Main Coverage Payment Bases
Actual Cash Value (ACV)
Pays to repair or replace damaged property minus depreciation. Older or heavily used items will
receive a lower payout.
Replacement Cost (RC)
Covers the full cost to repair or replace damaged items without depreciation. This reflects the
item’s original or current replacement value.
Extended Replacement Cost
Covers repair or replacement costs even if they exceed policy limits, offering extra protection
during periods of high construction or material costs.

How to Choose the Right Homeowners Insurance
When selecting a homeowners policy, consider:
• The type of coverage you need
• Your deductible and how much you can afford
• Your home’s vulnerability to specific risks
• Whether you need additional coverage for perils like floods or earthquakes

• Your desired policy limits
Because every home and situation is unique, it’s wise to discuss your needs with an insurance
agent to determine which policy type best protects your property and financial security.