The insurance industry refers to HO-5 policies as a “comprehensive form” because it provides the most complete coverage for your home, covering certain types of disasters called perils. There are many benefits to this type of policy but three stands out in particular:

  1. Losses and damages are repaid on a replacement cost basis.
  2. Extended limits for losses and damages to valuable personal items.
  3. Your stuff is covered on an open perils (rather than named peril) basis.

HO-5 policies come with open peril, so they are the most superior protection available to you as a homeowner! However, like an HO3 policy, some exclusions still apply to this kind of insurance plan. H0-5 is a more expensive plan than H0-3 insurance, but the coverage it offers may be worth it.

What Does HO-5 Insurance Cover?

Some of the more common named perils that HO-5 policies cover include the following:

  • Lightning or fire
  • Hail or windstorm
  • Damage caused by aircraft
  • Explosions
  • Riots or civil disturbances
  • Smoke damage
  • Damage caused by vehicles
  • Theft
  • Vandalism
  • Falling objects
  • Volcanic eruption
  • Damage from the weight of snow, ice, or sleet
  • Water damage from plumbing, heating, or air conditioning overflow
  • Water heater cracking, tearing, and burning
  • Damage from electrical current
  • Frozen pipes

The open-peril feature in HO-5 policies means your home is covered when any disaster strikes unless an excluded risk causes the loss. HO-5 policies also include the appended benefit of extending the open-peril feature to your personal belongings.

Common perils covered by HO-5 policies include:

Explosions

While others may only cover damage caused by explosions, HO-5 coverage can rebuild your home and fully replace your valuable personal items.

Fire

Between 2013 and 2017, 354,000 homes caught fire each year, causing nearly $7 billion in property damage, according to the National Fire Protection Association. Such fires can leave an HO-5 policyholder with the financial means to rebuild their home or replace their household items if appropriately insured.

Frozen pipes

Frozen pipes can burst, flooding your kitchen or bathroom. When the frigid winter temperatures arrive, homeowners may take a few steps to avoid frozen pipes, like allowing faucets to drip and maintaining an interior temperature of at least 65 degrees Fahrenheit. If frozen pipes damage your home, an HO-5 policy can help bring the damaged items back up to code and replace damaged items.

Lightning

According to the Insurance Information Institute, lightning struck almost 77,000 U.S. homeowners in 2019, causing more than $920 million worth of damage in insurance claims alone. HO-5 policies can help you repair your home plus replace your items if lightning strikes. 

Hail

According to III, an insurance company headquartered in Chicago, Hail claims (also known as storm-surge damage) have risen in recent years. Colorado, Illinois, Minnesota, Nebraska, and Texas are five states that have proven to be large hail targets. If a hailstorm is strong enough to cause real damage to your home, your HO-5 policy can help you replace broken windows and property, such as outdoor furniture and swimming pool covers.

Theft

HO-5 insurance is great for keeping your belongings safe. HO-5 policies will reimburse you if a burglar steals any of your possessions – including things like your houseguest’s personal effects while visiting! Additionally, HO-5 covers damage done to doors and windows.

Personal Belongings

In addition to other benefits, HO-5 insurance providers will allow you to increase certain limits for coverage of valuable items. 

What Does HO-5 Insurance Not Cover?

Although HO-5 policies are open peril, there are a few notable exceptions. Common HO-5 exclusions include:

  • Earthquakes
  • Water Damage from Floods, Sewer Backups, or a Water Leak
  • War
  • Power Failure
  • Nuclear Hazards
  • Pollution
  • Government Action
  • Vandalism if Property is Vacant for 60+ Days
  • Settling, Shifting, or Expansion of the Foundation
  • Mold and Other Fungal Rot
  • Neglect
  • Pest Infestations
  • Mechanical Breakdown

Who Is Best Suited for HO-5 Insurance?

Typically, HO-5 policies cover homes that fall in the category of high value, which many insurers define as having a market value of $750,000 or more. Many insurance providers offer higher coverage limits with an HO-5 policy, and it may be necessary for those who have homes valued at this level or more. Roughly 14% of single-family homes are insured by HO-5 insurance in the United States, making it the second most popular type of home insurance.

However, an HO-5 policy is a great choice for any homeowner who wants complete protection from all sorts of potential threats and hazards to their property.

How Much Does HO-5 Insurance Usually Cost?

According to the National Association of Insurance Commissioners, the average annual premium for HO-5 coverage in 2017 was $1,292. However, this cost varies from each insurance company and can rise significantly if your home is valued at a higher amount or you have added perils. 

What Are the Other Types of Home Insurance Policy Forms?

While shopping for home insurance policies, it’s important to understand the differences between each. 

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-3 Policies

An HO-3 policy is a coverage plan that covers your home’s construction, personal belongings, and liability in the event of damage or injury. The insurance will typically also cover additional living expenses and protection for other structures on your property.

An HO-3 policy is often referred to as an open perils policy, as it covers homes for all dangers except those explicitly excluded in its declarations page. It is the most common form of home insurance in the United States.

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-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 policies, 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 is better, HO-3 or HO-5?

HO-5 is better than HO-3 as far as coverage is concerned. This is because, while HO-3 offers a broader range for the structure of the insured home, it fails to cover some vital things, such as specific homeowner’s losses and legal liabilities. So, all in all, opting for an open perils policy offers benefits, unlike a named perils policy. HO-3, however, is the most purchased form of insurance in the United States. 

What’s the Difference Between HO-5 and HO-6 Policies?

An HO-6 policy is explicitly made for condo owners, whereas HO-5 is for homes. 

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