What is an HO-5 policy?

An HO-5 policy is the most comprehensive form of homeowners insurance on the market, offering broad protection for both your home’s structure and personal belongings.

Pat Howard 1600Kara McGinley

By 

Pat Howard

Pat Howard

Senior Editor & Licensed Home Insurance Expert

Pat Howard is a senior editor and licensed home insurance agent 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

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.

Updated February 21, 2022 | 2 min read

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An HO-5 policy, also known as a comprehensive form policy, is a superior type of homeowners insurance, offering more protection for both your home and personal property than any residential policy on the market.

What sets an HO-5 policy apart from standard homeowners insurance is the level of protection for personal belongings like furniture, clothes, and appliances. In an HO-5 policy, your personal property is covered on an “all-risks” basis. Also known as open perils, this means you’re covered against everything except the perils exempt from the policy, such as earthquakes, flooding, and intentional acts. When you file an HO-5 claim involving your belongings, you don’t need to prove if the loss is covered or not — the burden of proof is on your insurance company.

Key Takeaways

  • An HO-5 policy is a type of homeowners insurance that features more robust personal property coverage than a standard policy.

  • With an HO-5, your belongings are covered against everything except the perils specifically mentioned in the policy.

  • Your belongings are also covered at their replacement cost, meaning you’ll be reimbursed the value of new items after a loss.

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What is HO-5 insurance?

An HO-5 policy is the most comprehensive form of homeowners insurance on the residential market, providing open perils coverage and replacement cost claim settlements for your home and personal property. 

The biggest difference between the HO-5 and the other policy forms is the scope and quality of personal property coverage. 

Here’s a look at the different coverages in an HO-5 policy:

CoverageWhat does this coverage do?Loss valuation
Section I - Property Coverages
Coverage A - DwellingCovers the structure of your home and built-in appliancesReplacement cost
Coverage B - Other StructuresCovers detached structures on your propertyReplacement cost
Coverage C - Personal PropertyCovers your personal belongings both inside and outside the homeReplacement cost
Coverage D - Loss-of-usePays for additional living expenses while your home is being repaired
Additional CoveragesExplains all the additional coverages in a standard policy—like debris removal, loss assessment and ordinance or law—and the insured limits of each
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
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

HO-3 vs. HO-5: What’s the difference?

An HO-3 policy is the most common form of homeowners insurance. Here is how an HO-5 policy differs from it.

Policy typeDwelling coveragePersonal property coverageDwelling claim reimbursementsPersonal property claim reimbursements
HO-3Open perilsNamed perilsReplacement costActual cash value
HO-5Open perilsOpen perilsReplacement costReplacement cost

At the end of the day, you can’t go wrong with an HO-3 or HO-5 — both are light-years ahead of the basic form policies (dwelling fire, HO-1, and HO-2) in terms of coverage quality and availability. But if it’s between the two and you happen to own a lot of stuff, an HO-5 policy is your best bet for providing maximum protection for your personal belongings.

What does an HO-5 policy cover?

An HO-5 covers the structure of your home, any other structures on the property, and your personal belongings against everything except the specific perils listed in the policy. 

Here are some common perils covered by an HO-5 policy:

  • Fire or lightning

  • Windstorm or hail

  • Explosion

  • Riot or civil commotion

  • Aircraft

  • Vehicles

  • Smoke

  • Vandalism

  • Theft

  • Falling objects

  • 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

  • Volcanic Eruption

What does an HO-5 policy not cover?

Although an HO-5 policy offers more protection than standard homeowners insurance, there are still a number of exclusions to be aware of. Here’s a look at what your HO-5 policy will not cover:

  • Ordinance or 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 vacant 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

  • Damage caused by animals owned by insured

How much does an HO-5 homeowners insurance policy cost?

The average annual premium for an HO-5 policy in the U.S. is $1,186 per year or $99 a month, according to the NAIC. [1] Meanwhile, an HO-3 policy averaged out to around $1,899 per year or $158 a month, according to our analysis of 2022 home insurance rate data across the country. 

Where you notice the biggest price discrepancy between the two insurance types is with high-value homes.

Estates with an insurable value of $500,000 or more paid an average of $2,824 per year or $235 per month for an HO-5 policy. [2] Meanwhile, the average cost of an HO-3 policy with over $500,00 in dwelling coverage comes with even higher premiums at $3,066 per year or $256 per year, according to our Policygenius analysis.

Insurance companies generally avoid writing HO-5s in high-risk areas.

One thing to keep in mind is that HO-5 insurance is usually intended for newer homes in areas at low risk of weather damage or other types of loss. This is because the broader personal property protection offered by these policies often means higher claim payouts. That, coupled with claim frequency, limits the availability of HO-5s in regions with considerable risk exposure.