What is an HO-3 policy?


An HO-3 policy is insurance lingo for “standard homeowners insurance”, but it also refers to a specific legal document that acts as an insurance contract.

Pat Howard 1600Stephanie Nieves author photo


Pat Howard

Pat Howard

Property and Casualty Insurance Expert

Pat Howard is a senior editor at Policygenius specializing in property and casualty insurance. His work has been featured on Property Casualty 360, Fatherly, MarketWatch, and more.


Stephanie Nieves

Stephanie Nieves

Property and Casualty Insurance Expert

Stephanie Nieves is an insurance editor at Policygenius in New York City, specializing in home and auto insurance. Her work has appeared in Business Insider, PayScale, Fairygodboss, and The Muse.

Updated December 21, 2020|3 min read

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If you have homeowners insurance, you most likely have what’s called an HO-3 policy — the most common type of home insurance policy in the industry. Also referred to as the Homeowners Policy Special Form 3, an HO-3 is the form or template behind most standard homeowners insurance policies.

Your HO-3 policy form is essentially the insurance manual that breaks down how each of the six coverages in your policy work. It also details which perils are covered and which aren’t. But since no one person should ever go through the trouble of deciphering this 22-page collection of legalese, we did the dirty work and highlighted the important information you should know about.

Key Takeaways

  • An HO-3 policy is insurance-speak for “standard homeowners insurance”, but it also refers to the specific legal document that states what the insurance company covers and what they don’t cover

  • With an HO-3 policy, your home and detached structures on your property are protected from “open perils” meaning all risks (minus the ones specifically excluded from your policy), and “named perils” for your personal belongings which cover 16 specific risks

  • Common exclusions in an HO-3 policy include floods, earthquakes, regular wear and tear, and water damage

What is an HO-3 homeowners insurance policy?

An HO-3 policy is just standard homeowners insurance, it covers your home and personal belongings from unexpected damage and also covers your liability in case you’re responsible for injury or property damage. There are eight different types of home insurance — one suited for renters, one for condo owners, and so on — but HO-3 policies, which cover standalone homes, are the most common type.

What does an HO-3 policy cover?

Here’s a look at the coverages included in a standard homeowners insurance policy and the typical reimbursement limits of each component:

Section I - Property Coverages
Coverage A - DwellingCovers the structure of your home and built-in appliancesThe home's replacement cost
Coverage B - Other StructuresCovers detached structures on your property10% of the dwelling limit
Coverage C - Personal PropertyCovers your personal belongings both inside and outside the home50% of the dwelling limit
Coverage D - Loss-of-usePays for additional living expenses while your home is being repaired20% of the dwelling limit
Additional CoveragesExplains all the additional coverages in a standard policy — like debris removal, loss assessment and ordinance or law — and the insured limits of eachVaries by coverage
Section II - Liability Coverages
Coverage E - Personal LiabilityPays for legal and medical bills if you're held liable for injury or personal property damage to someone else$100,000-$500,000
Coverage F - Medical Payment To OthersIf a guest is injured in your home, it pays for their medical bills, regardless of who is at fault$1,000-$5,000

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What perils are covered by an HO-3 policy?

There are two categories of property damage protection within an HO-3 policy: open perils, also called all risks coverage for your home and detached structures on your property and named perils coverage for your personal belongings.

Open perils coverage covers your home and other structures against every peril except for those specifically excluded from your policy. With named perils coverage, your personal property is covered against the 16 perils named in your policy, including:

  1. Windstorm or hail

  2. Fire or lightning

  3. Smoke

  4. Explosion

  5. Power surges

  6. Falling objects

  7. Weight of ice, sleet, or snow

  8. Freezing

  9. Volcanic eruption

  10. Theft

  11. Vandalism and malicious mischief

  12. Sudden and accidental damage to water heater or HVAC

  13. Accidental discharge or overflow of water

  14. Aircraft

  15. Vehicles

  16. Riot or civil commotion

What does an HO-3 policy not cover?

Section I of an HO-3 policy includes a list and description of both insured perils, the damage you’d be reimbursed for if you filed a claim for a loss and excluded perils, the damage that wouldn’t be covered.

Common HO-3 exclusions include:

Does an HO-3 policy cover flood damage?

HO-3 policies do not cover flood damage — in fact, none of the eight basic types of home insurance will cover flooding. But you can purchase flood insurance which is separate, additional coverage that protects your home from water damage caused by storm surges, high tides, overflowing lakes and rivers, and other natural floods.

➞ Learn more about flood insurance

HO-3 vs HO-6

HO-6 policies are designed for condo owners and are the second most common type of homeowners insurance. Both HO-3 and HO-6 policies feature open perils coverage for the dwelling and other structures portions of your policy and named perils coverage for personal belongings, but the main difference between the two is the particulars of dwelling coverage, or the structure of the home or condominium.

Since your condo or co-op building’s HOA insurance or master policy includes a certain amount of coverage for the structure of the unit (typically the interior walls, floors, electrical wiring, and plumbing), an HO-6 essentially acts as supplemental coverage for what’s already covered by the HOA policy. If your condo is renovated or repaired, for example, your HO-6 dwelling coverage should be enough to cover whatever upgrades were made.

➞ Learn more about the different types of homeowners insurance policies

More about

Homeowners Insurance

What are the different types of homeowners insurance policy forms?

There are eight different types of homeowners insurance policies for various home types and coverage needs.

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What’s included on a homeowners insurance policy?

Your homeowners policy includes different sections that explain what is and isn’t covered by your policy. It also thoroughly explains your policy limits, deductibles, and premiums.

Read more

What is dwelling coverage?

Dwelling coverage is the portion of your homeowners insurance policy that helps pay to rebuild or repair the physical structure of your home in the event of a covered loss.

Read more