Coverage Options for Old Homes
There are multiple options for insuring older homes.
Basic Form (HO1)
The simplest and least comprehensive category of homeowners insurance is called Basic Form, or type HO1 home insurance. This coverage protects against a few general categories of risks to your home. Basic form homeowners insurance covers:
Fire and/or smoke
Damage from Vehicles
Riot or commotion
Basic form insurance policies usually only include dwelling coverage, not personal property coverage or personal liability. These may be added as supplemental coverage with some insurance companies. Basic form insurance is often not considered fully adequate by mortgage companies, so if you’re financing your home, this may not be an option. However, basic form homeowners insurance may suffice for some owners of older homes.
Old Home Form (HO8)
Since older homes were generally built on less stringent code standards than newer ones, insurance companies have created an entire specialized category to classify old homes – type HO8. Type HO8 home insurance policies often only cover basic perils, similar to those listed under HO1 policies. Historical homes and landmarks are eligible for coverage under an HO8 category. In some cases, owners of registered landmarks may be barred from making substantial changes to their home’s structures and systems, this is something to consider if you’re purchasing an older home or fixer-upper with the intention of “flipping” it.
If you’re trying you’re trying to save money on your home insurance (and let’s be honest, who isn’t?), basic coverage for your older home should suffice. For high-value or historic homes though, HO8 policies are the very best, most protective option.
Special Form (HO3)
Special form phone insurance policies are the most common. As opposed to Basic Form (HO1), which only covers “named perils” (only covering risks specifically listed in the policy), special form home insurance is categorized as “open peril” policies. This means that homeowners are protected from any danger their homes face unless otherwise stated, or excluded in policy documents. Most HO3 policies will exclude the following types of damage:
General wear and tear
Depending on your specific homeowners insurance company and unique policy, these exclusions may vary. However, you can purchase flood insurance and other peril-specific policies as stand-alone additional coverage.
Keep in mind too that homeowners of landmarks or historical properties are often forbidden from updating HVAC, electrical, and other systems in their homes. This is done in order to safeguard historic preservation. This unfortunately excludes them from purchasing an HO3 policy.