When you imagine the kind of property that needs homeowners insurance, a single-family home in the suburbs might come to mind, but there are actually eight policy types — or forms — for different property types and coverage needs.
Types of homeowners insurance
HO-1: The most basic and limited type of policy for single-family homes, HO-1s are all but nonexistent nowadays
HO-2: A more commonly used policy and a slight upgrade from the HO-1
HO-3: The most common type of homeowners insurance policy, with broader coverage than the HO-2
HO-4: A policy type that is specifically for renters (usually called renters insurance)
HO-5: The most comprehensive form of homeowners insurance and the second most common policy type for single-family dwellings
HO-6: A type of coverage designed for condo owners
HO-7: The type of policy you get if you own a mobile or manufactured home
HO-8: A special type of homeowners insurance for older homes that don’t meet insurer standards for other policy forms
HO-1: Basic Form
Basic form HO-1 homeowners insurance is the most limited in terms of coverage. With an HO-1, Your home and personal belongings are covered at their actual cash value, and an HO-1 only protects your home and personal belongings against 10 named perils, meaning these specific causes of damage or loss:
Fire or lightning
Windstorm or hail
Explosion
Riot or civil commotion
Aircraft
Vehicles
Smoke
Vandalism
Theft
Falling objects
HO-2: Broad Form
Broad form HO-2 policies are more common than HO-1s and are a definite upgrade from the basic form policy. HO-2s cover the dwelling — meaning the structure of your home — at its replacement cost value, and your personal property at its actual cash value. An HO-2 also protects your home and personal belongings against six additional named perils, including damage from:
Weight of ice, snow, or sleet
Accidental discharge or overflow of water or stream
Sudden and accidental tearing apart, cracking, burning, or bulging of a built-in appliance like a water heater or centralized air conditioner or heating system
Freezing
Sudden and accidental damage from an artificially generated electrical current, like power surges
Volcanic eruption
HO-3: Special Form
An HO-3, or special form policy, is the most common type of homeowners insurance policy on the market, accounting for the vast majority of single-family home policies.
HO-3s provide all-risks coverage for your home and cover your personal property from the same named perils in HO-1 and HO-2 policies. All-risks, or open-perils coverage, means you’re covered for everything except the causes of loss that are specifically excluded in your policy.
Commonly excluded perils
By default, HO-3 policies cover your home at its replacement cost and your personal property at its actual cash value. Most insurance companies will let you add a replacement cost endorsement to your personal property coverage for a small addition to your premium.
HO-4: Contents Broad Form
Better known as renters insurance, HO-4 policies are specifically for those who rent their home or apartment. Renters insurance covers your personal property both inside your rental property and anywhere in the world, like if your laptop is stolen while you’re traveling. Renters insurance covers the same 16 named perils found in the broad and special form policies. Your personal property is usually covered at its replacement cost.
Like HO-3 policies, renters insurance also covers your liability (aka legal expenses) and your additional living expenses if your apartment is damaged and you need to live elsewhere temporarily.
HO-5: Comprehensive Form
Comprehensive form homeowners insurance is just what it sounds like, the most robust form of single-family home protection. HO-5 policies are very similar to HO-3s, but there are some notable differences:
HO-6: Unit-owners Form
Also known as condo insurance, an HO-6 policy is for people who live in a condominium or co-op. The amount of coverage you’ll need in your condo policy can vary — it really depends on what’s covered by your condo association’s HOA insurance.
You’ll likely need enough dwelling coverage in your condo policy to cover the cost of any condo upgrades that you made, like if you installed custom light fixtures. Your condo policy also includes personal property, loss of use, personal liability, medical payments, and loss assessment coverage.
HO-7: Mobile Home Form
Mobile home insurance is basically an HO-3 policy, but designed specifically for mobile homes, which can’t be covered under a normal single-family home policy.
The type of mobile homes covered under HO-7 policies include, but aren’t limited to:
Trailers, travel trailers, fifth-wheel trailers
Single-wide manufactured and single-wide mobile homes
Double-wide manufactured and double-wide mobile homes
Sectional homes
Modular homes
Park model homes and RVs
HO-8: Modified Coverage Form
HO-8 homeowners insurance is designed for older or historic homes with ornate features and other characteristics that would be difficult to replace in the event of a loss. Essentially, if the home's replacement cost is higher than its market value, then it likely needs HO-8 insurance.
Similar to HO-1 basic form policies, HO-8s are named peril policies that only provide coverage for 10 perils, and reimbursement is determined by the home’s actual cash value rather than replacement cost.
Frequently asked questions
How much should I pay for homeowners insurance?
The average cost of homeowners insurance in the U.S. for an HO-3 policy is $1,754 per year or $146 a month, according to our analysis of 2022 home insurance rate data across the country. That said, homeowners insurance costs vary depending on location, the age of your home, its roof, and more.
What is the most common type of homeowners insurance?
The most common form of homeowners insurance is an HO-3 policy. Most single family homes are covered by HO-3 policies.
How do I choose homeowners insurance?
When deciding on homeowners insurance, it’s important to know what kind of policy you need and how much coverage you need to protect your home. It’s a good idea to compare multiple insurers to make sure you’re getting the best deal — Policygenius agents can help you compare different insurers all at once.
What if I can't find homeowners insurance?
If you're not able to find homeowners insurance coverage due to your home's location and risk of damage, there are a couple of options that you'll want to consider: a FAIR Plan offered through your state's insurance department, or a surplus lines insurance policy offered by excess and surplus (E&S) carriers that aren't regulated by the state.
