HO-3 insurance is the most popular and common type of home insurance offered by almost every provider. The HO-3 policy includes dwelling coverage (the house itself), along with liability protection for any injuries that happen on your property and additional living expenses if you have a total loss due to theft or other disasters covered under this plan.

What Does HO-3 Insurance Cover?

An HO-3 policy is a form of insurance that can help safeguard you against many disasters. It protects your property from damages and provides coverage for legal liability and living outside your home after an emergency. Additionally, the costs associated with medical injuries are covered by this type of insurance.

One of the significant advantages of an HO3 policy is that it provides full replacement cost coverage for your home and other structures. Some policies offer this as a default, while others require you to add on an additional premium to receive such coverage.

Dwelling Damage

HO-3 policies cover a variety of common perils that could afflict your home. Any exclusions must be explicitly noted in the policy, as this insurance only covers architectural damage to your dwelling and any additional structures on your property up to limits based on specific conditions and insurance price points. 

Personal Property Damage

HO-3 policies personal property coverage is provided on a named perils basis. This means that your clothes, furniture, appliances, and other items are only covered by dangers cited explicitly in the policy. 

Your personal property clause may cover certain things even if they are damaged off your premises. This can include a tree falling on an item left in the yard or damaged furniture moved into/out of storage.

To ensure homeowners get comprehensive coverage, it is essential to know about the sub-limits in your contract. In an HO-3 policy, high-value items will only cover damage up to a specified limit—not your overall limit.

Liability Expenses 

Liability coverage is an insurance category that protects you financially if someone gets injured on your property. Liability coverage is a type of insurance that protects you from paying for medical expenses, legal fees, lost wages, and even death benefits. 

However, there are exceptions to this rule: if someone intentionally hurts themselves or others on your property, they would not be covered under liability protection.

It’s also worth noting that an HO-3 policy will cover a limited amount of medical payments. This coverage is unrelated to legal liability and provides reimbursement for basic medical expenses, generally no more than a few thousand dollars.

Costs of Living Elsewhere

Loss of use coverage, also called additional living expenses coverage, will reimburse you for extra costs if your home is declared uninhabitable. For example, this might include hotel or Airbnb fees when a covered peril makes it impossible to stay in your home.

What Does HO-3 Insurance Not Cover?

Open peril

HO-3 policies include open peril coverage for your dwelling. This means that any loss is covered, except those excluded from the policy. HO-3 insurance policy exclusions vary, however 

typical exclusions include: 

  • Wear and tear
  • Negligence
  • Mold, rust, or corrosion
  • Pet damage
  • Pests or rodents
  • Earthquakes
  • Floods
  • Building code enforcement
  • Government action

Named peril

HO-3 insurance does not cover events not listed in the policy, so your belongings will only be covered for named perils. Examples of covered perils include:

  • Fire and lightning
  • Smoke
  • Hail and wind
  • Riots
  • Explosions
  • Falling objects
  • Theft
  • Vandalism
  • Weight of ice, snow, or sleet
  • Accidental or sudden water damage

Who Is Best Suited for HO-3 Insurance?

HO-3 insurance is ideal for homeowners with single and multi-family homes, townhouses included. In fact, the majority of U.S. homeowners have this type of policy! There are several everyday situations your HO-3 policy can also protect you from. Your laptop getting stolen at a coffee shop, freezing pipes bursting in the winter, or faulty wiring causing things to catch fire all fall under this umbrella.

HO-3 also allows you to add endorsements to your policy if needed for extended coverage. 

How Much Does HO-3 Insurance Usually Cost?

Each insurance company calculates homeowner’s insurance differently. Your policy might be different from your neighbor’s, and it could change from one day to the next depending on your needs.

Hurricanes pose a particular threat to coastal homes and are usually more expensive for homeowners. If you live in an area at risk of tropical storms, your home insurance costs may be higher because it could damage or destroy the structure and anything inside it.

What Are the Other Types of Home Insurance Policy Forms?

While HO-3 policies are the most popular in America, there are others to review while you’re shopping around for home insurance. 

HO-1 Policies

An HO-1 policy, also called basic form, is a bare-bones homeowner insurance policy for your dwelling and covers only a few perils. It is the most basic and cheapest form of homeowner’s coverage that you can get for your home or personal property but isn’t offered in most states.

HO-2 Policies

An HO-2 policy is also known as the broad form and offers more coverage than an HO-1 but less coverage than an HO3. Like a basic named perils policy, this type of insurance covers specific damages listed and nothing else. 

HO-4 Policies

HO-4 insurance, also known as renters protection or renters’ coverage, is liability and property damage insurance for your personal possessions. It can also include temporary living expenses if you have to leave home due to a fire.

HO-5 Policies

HO-5 policies are similar to an HO-3 but provide you with premium coverage for your home. They cover both the building and its contents like furs, fine art, and jewelry.

HO-6 Policies

HO-6, also known as condo insurance, is designed to protect condo owners and their property. The amount of coverage needed will vary depending on what your HOA covers and how much you’re willing to pay.

HO-7 Policies

HO-7, commonly known as mobile home insurance, is a type of homeowner’s policy that provides average coverages like liability or personal property damage explicitly designed for mobile homes.

HO-8 Policies

HO-8 insurance can provide you with protection if your home doesn’t meet the standards required by most insurers.

Homeowner Insurance FAQ

What’s the Difference Between HO-3 and HO-5 Policies?

The HO-5 insurance policy is more comprehensive and covers damage to your personal property in all cases, except for those specifically excluded from the policy.

What’s the Difference Between HO-3 and HO-6 Policies?

HO-3 insurance covers homes, whereas HO-6 coverage includes condos. The other difference is the type of property each policy covers; both policies have personal and liability coverage as well as loss of use reimbursement forms when filing a claim.

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