What is an HO-1 insurance policy?

Also known as basic form homeowners insurance, HO-1 insurance is the most bare bones type of homeowners insurance that only protects your home against 10 types of loss.

Kara McGinley


Kara McGinley

Kara McGinley

Editor & Licensed Home Insurance Expert

Kara McGinley is an editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

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Also called basic form homeowners insurance, HO-1 policies are the least comprehensive form of homeowners insurance coverage that you can get. These policies are less common than the seven other types of homeowners insurance policies available on the market — HO-1 policies only accounted for 1.62% of single family home policies countrywide in 2019, according to the National Association of Insurance Commissioners (NAIC). [1]

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What is HO-1 insurance?

HO-1 insurance is a bare bones type of homeowners insurance that protects your home and its contents in the event of a covered loss. If you have an HO-1 policy, you’ll only be protected from 10 specific causes of loss — meaning you’d have to pay out of pocket if your home is damaged by something other than one of the 10 named perils listed in your policy.

HO-1 homeowners insurance policies are less popular than other types of homeowners insurance, mostly because HO-1 policies simply don’t offer as much coverage as other kinds of homeowners insurance. For this reason, some states and insurers discontinued offering HO-1 policies altogether.

What does an HO-1 insurance policy cover?

HO-1 policies can help pay to repair your home and replace your belongings if they’re damaged by a covered loss. HO-1 homeowners insurance policies are named peril policies, meaning you’re only protected against the 10 named perils listed in your policy. 

Here are the 10 perils typically covered by an HO-1 policy:

  • Fire and lightning 

  • Windstorm and hail

  • Explosions

  • Riot and civil commotion

  • Damage caused by an aircraft

  • Damage caused by a vehicle that’s not your own

  • Smoke damage

  • Vandalism and malicious mischief

  • Theft

  • Volcanic eruption

HO-1 homeowners insurance policies are actual cash value policies, which means that depreciation is factored into your claim payout. 

Here’s an example of how actual cash value policies work. 

Say your roof is 10 years old and it’s damaged in a hail storm. With an HO-1 policy, you won’t receive a payout for a brand new roof. Instead, your claim reimbursement will subtract 10 years of age and wear and tear from the overall payout.

Consider HO-2 or HO-3 policies for more protection.

HO-2 policies, or broad form policies, offer more coverage than HO-1. HO-2 policies are also named peril policies, but they include coverage for more types of loss, including falling objects and some types of water damage. 

An HO-3 policy, or special form policies, is the most common type of homeowners insurance. HO-3s are all-risk policies, meaning you’re protected against all types of loss except for the ones specifically excluded in your policy, like floods and earthquakes.

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What does an HO-1 policy not cover?

As mentioned, HO-1 policies only protect you from the 10 named perils listed in the policy. Most other policies include coverage for 16 named perils. 

Below are perils not covered by HO-1 insurance: 

  • Falling objects

  • Weight of ice, snow, and sleet

  • Accidental discharge and overflow of water and stream

  • Sudden and accidental tearing apart, cracking, burning, and 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 a power surge

No standard home insurance policies include coverage for earthquakes or floods.

Homeowners insurance never covers flood damage or earthquakes. If you’re looking for that type of protection, consider purchasing flood insurance. Some insurers may offer a coverage add-on — called an endorsement — for earthquake damage. A Policygenius agent can help you compare multiple insurers that offer earthquake insurance

HO-1 insurance vs. HO-3 insurance 

Below is how HO-1 policies differ from HO-3 policies — the most common form of homeowners insurance.


HO-1 insurance

  • Covers your home and contents if damaged by one of the 10 named perils in your policy

  • Covers your home and belongings at their actual cash value, meaning depreciation is factored into your claim payout


HO-3 insurance

  • Covers your home from all types of damage except for ones excluded in the policy

  • Covers your home at its replacement cost value

  • Covers your personal property from 16 named perils at their actual cash value — you may be able to upgrade to replacement cost coverage depending on the insurer

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