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: the HO-1, HO-2, HO-3, HO-4, HO-5, HO-6, HO-7, and HO-8.
By
Pat HowardPat HowardManaging Editor & Licensed Home Insurance ExpertPat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.&Kara McGinleyKara McGinleySenior Editor & Licensed Home Insurance ExpertKara McGinley is a former senior editor and licensed home insurance expert at Policygenius, where she specialized in homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Forbes Advisor, Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.
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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.
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
Basic policy forms generally aren’t offered by insurance companies anymore.
As of 2018, HO-1s only made up 1.57% of single-family home policies countrywide, according to the latest data from the National Association of Insurance Commissioners (NAIC).
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
Ordinance of law
Earth movement
Water damage from flooding, sewer backups, or water that seeps up from the ground
Power failure
Neglect
War
Nuclear hazard
Intentional loss
Government action
Theft to a dwelling under construction
Vandalism or malicious mischief (if the home was vacant for more than 60 days)
Mold, fungus, or wet rot (except if it resulted from an accidental discharge or overflow of water)
Wear and tear
Mechanical breakdown
Smog, rust or other corrosion
Smoke from agricultural smudging and industrial operations
Discharge, dispersal, seepage of pollutants
Settling, shrinking, bulging, or expanding of parts of the structure like your foundation or walls
Birds, vermin, rodents, insects Animals owned by insured
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-3 policies also include liability coverage and loss-of-use coverage.
Liability coverage pays for legal fees or medical expenses if you’re found legally responsible for someone else’s injury, like if a guest slips on your icy front steps. Loss-of-use coverage pays for additional living expenses if you need to temporarily live elsewhere — like a hotel — while your home is being repaired after a covered loss.
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-4 policies do not include dwelling coverage.
Because HO-4 policies are designed for renters and not homeowners, an HO-4 policy doesn’t include dwelling coverage for the structure of the home (that’s your landlord’s responsibility).
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-5 policy
Dwelling and personal property are insured at their replacement cost by default.
All-risks coverage for both your home and personal belongings.
High coverage limits for expensive types of property with normally strict coverage limits, including jewelry, fine furs, and certain electronics.
HO-3 policy
Dwelling is insured at its replacement cost and personal property is insured at its actual cash value.
All-risks dwelling coverage but named perils personal property coverage.
Limited coverage for expensive types of property, like jewelry, fine furs, and certain electronics.
HO-5 policies are generally for high-net-worth properties in high-risk areas.
HO-5 policies are designed for properties that need extra protection. If you get coverage through a company like Chubb or AIG, you’re likely getting HO-5 coverage.
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.
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
HO-8 homeowners insurance is designed for homes that don’t meet the insurer standards required for most types of homeowners insurance.
Here’s how it works.
You can likely only qualify for an HO-8 if you live in an older home at high risk of loss due to aluminum wiring, outdated plumbing, or a roof that’s falling apart. You’ll likely need to upgrade your aluminum wiring to copper, install new piping, and replace your roof to qualify for a standard HO-3 policy.
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.
HO-8 policies are valuable because your high-risk home can be covered without full updates or a four-point inspection, so if you’re intent on keeping the home exactly the way it was when it was first built five generations prior, despite any added risk, this policy may be for you.
The average cost of homeowners insurance in the U.S. for an HO-3 policy is $1,899 per year or $158 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.
Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.
Kara McGinley is a former senior editor and licensed home insurance expert at Policygenius, where she specialized in homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Forbes Advisor, Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.
