Types of Homeowner’s Insurance

“I’ve been told I need homeowners’ insurance because it keeps me financially safe from the perils of owning a home, like a fire in the kitchen, or a barbecue fire and the high school kids “drawing” things on my exterior garage wall. There’s only one kind, right?! Covered!” Well, actually there are several kinds of homeowner’s insurance, some of them aren’t even for owners of homes, but renters. It’s okay, we’ve got a full breakdown.

HO-1 “Basic Form”

• Most limited homeowners’ insurance.
• Your home and personal belongings are covered at their actual cash value.
• Makes up 1.57% of single-family home policies in the U.S.
• Protects against 10 named perils:
  • Falling Objects
  • Windstorm or hail
  • Explosion
  • Theft
  • Riot or civil unrest.
  • Fire or lightning
  • Smoke
  • Vehicle
  • Vandalism
  • Aircraft

HO-2 Broad Form

• More common and an upgrade from HO-1.
• Covers your home and its replacement cost.
• Your personal property is covered at its actual cash value.
• Makes up 6.05% of single-family homeowners insurance policies in the U.S.
• Protects against the same dangers as HO-1 but adds 6 more named perils:
  • Freezing.
  • Ice, snow, and sleet.
  • Volcanic eruption.
  • Accidental tearing apart, cracking burning of water heater, centralized air conditioner or heating system.
  • Overflow of water or stream.
  • Power surges or damages by electrical currents and appliances.

HO-3 Special Form

• Most common type of homeowners insurance on the market.
  • Makes up 79.09% of single-family homeowner policies in the U.S.
• Provides “all-risks” coverage against all the aforementioned perils and all the rest that could happen to your dwelling and personal property.
• It does outline the excluded perils, specific to your policy, but commonly are:
  • Nuclear Hazzard
  • Birds, vermin, rodents, and insects
  • Pets or animals owned by insured
  • Ordinance or law
  • Water damage from flooding
    • Sewer backups
    • Water from the ground
  • Earth movement
  • War
  • Neglect
  • Government action
  • Power failure
  • Fungus, wet rot, or mold
  • Wear and tear
  • Settling, bulging, expansion, or shrinking.
  • Normal wear and tear.
  • Mechanical breakdown.

HO-4 Renters Insurance

• This was created specifically for those who lease homes or apartments.
  • 73.84 % of condo or co-op policies are HO-4.
• Your personal property is covered both inside the rental property and really anywhere in the world at its replacement cost.
• Covers your liability and additional living expenses in the case that your apartment is damaged and you need to live somewhere else temporarily.

HO-5 Comprehensive Form

• This is considered the best and most robust form of single-family home protection.
• Similar to HO-3, but with a few differences:
  • Personal property and home are covered at their replacement value
  • Provides all-risk coverage for both your home and possessions
  • Include higher coverage limits for higher value property
  • These policies are used for higher-value properties in high-risk areas requiring additional coverage.

HO-6 Unit-Owners Form

• This is known as condo insurance; this policy was made for people who live in a condominium or a co-op.
  • Your coverage amount is dependent on what your HOA or condo association’s policy covers.
    • The HOA policy often called the “master policy” covers the building’s common zones and the structure of the apartment prior to you living there.
      • It does not cover improvements and updates made while you live there.   
• Your condo policy also includes personal liability, medical payments, loss of use, loss assessment coverage along with your personal property.

HO-7 Mobile Home Form

• This is an HO-3 policy designed for mobile homes.
  • A mobile home cannot be covered under a normal single-family home policy.
• This policy covers
  • Trailers of all kinds, even travel versions
  • Single-wide mobile homes
  • Double-wide mobile homes
  • Sectional homes
  • Modular homes
  • Park model homes and recreational vehicles

HO-8 Modified Coverage Form

• This version is designed for homes that aren’t in line to meet insurer standards.
  • This specific policy kind covers approximately 0.47% of single-family home policies.
• This is a great option for those living in older homes, with their higher risk constructions and old-school electrical wirings.
• This is, similar to HO-1, a named peril policy.
  • The same 10 perils from HO-1 are covered by this sort of policy.
• Reimbursement is determined based on the home’s actual cash value, not the replacement cost.
• Your home can be covered without any updates or a four-point inspection.