8 types of homeowners insurance forms
Nearly every type of insurance policy that protects your living space will fall into one of these eight classifications.
The simplest and least comprehensive type of homeowners insurance provides coverage for only a handful of potential problems:
HO-1 insurance policies usually only provide dwelling protection. Some insurance companies may allow you to add personal property coverage at an additional cost. Most mortgage lenders don’t consider this type of policy to be adequate coverage, so if you’ve financed your home, an HO-1 policy is likely not an option.
A broad form homeowners insurance policy will cover all the dangers included in basic form coverage, plus:
Falling objects
Weight of ice, snow, or sleet
Freezing of household systems, including HVAC systems
Sudden and accidental damage to pipes and other household systems
Accidental discharge or overflow of water or steam
Sudden and accidental damage from artificially generated electrical current
HO-2 policies typically cover both dwelling protection and personal property. In some cases, they may also include personal liability coverage. However, they still only cover the specific damages listed in the policy. For example, these policies cover water damage from steam, but not from floods.
Special form policies are the most common type of homeowners insurance. HO-1 and HO-2 policies are examples of “named perils policies.” That means they only cover dangers that are specifically listed in the policy. HO-3 policies are “open peril policies.” That means they’ll cover all dangers except those specifically excluded in the policy documents.
Most HO-3 policies exclude the following types of damage:
Exclusions can vary depending on whether the insurer believes your home is at high risk for certain types of damage. For example, HO-3 policies on homes in areas at high risk of wildfires will often have a fire damage exclusion.
HO-3 policies typically include dwelling protection coverage, other structures coverage, personal property coverage, and liability coverage — many will also include loss of use coverage. However, the personal property coverage is usually limited to a narrower range of perils than the dwelling protection coverage.
HO-4 policies, more commonly known as renters insurance, are for people who rent rather than own their homes. Renters insurance policies typically cover all the same dangers as HO-2 policies. These policies include personal property coverage and liability coverage but don’t cover the physical structure of the house. Some HO-4 policies may also include loss of use coverage for the tenant.
Comprehensive form policies are usually the broadest and provide the highest level of coverage; not surprisingly, they also tend to be the most expensive type of homeowners insurance policies.
The biggest difference between HO-3 and HO-5 policies is that most HO-3 policies are “actual cash value” policies, whereas typically HO-5 policies are typically “replacement cost value” policies. An actual cash value policy will only reimburse you for the actual value of a damaged or destroyed item, while a replacement cost value policy will reimburse you for however much it would cost to completely replace or repair the damaged or destroyed item (up to the coverage limits on the policy).
HO-5 policies also provide personal property coverage against a wider range of dangers than the typical HO-3 policy. Many HO-5 policies also have extra coverage for high-value personal property, such as jewelry and artwork.
Not surprisingly, condo form insurance is for condominium owners. HO-6 policies generally protect against the same types of dangers as HO-3 policies. They provide dwelling protection coverage with a twist: HO-6 policies cover the walls, floors, and ceiling of the condo unit but not the rest of the building. These policies also include personal property and liability coverage and may include loss of use coverage.
HO-6 policies also apply to other types of co-op living. Generally, a condo association or HOA will cover property damage in common areas but will also require unit owners to hold condo insurance for their units.
If you own a mobile home or manufactured home, you likely have an HO-7 policy. Mobile home form policies are typically identical to HO-3 policies, except they’re designed specifically for mobile and manufactured homes. Like HO-3 policies, they provide dwelling protection coverage, other structures coverage, personal property coverage, liability coverage, and possibly loss of use coverage as well.
HO-7 policies generally only protect the home when it’s stationary; if you plan to move your mobile or manufactured home, you’ll need to get a special policy to cover it while it’s in transit. It’s important to remember that mobile home insurance and insurance for RVs are different, so make sure you’ve selected the right category.
Older homes have generally been built to less stringent code standards than recently built homes, so insurers have designed a specialized type of homeowners insurance policy for them. HO-8 policies often only cover the basic perils listed in HO-1 policies and generally apply to homes that are registered landmarks or otherwise deemed historic homes.
Owners of registered landmarks are typically forbidden from updating HVAC, electrical, and other parts of the home to enable them to qualify for a standard HO-3 policy, so an HO-8 policy is often the only option for them.
