Homeowner’s insurance is well-regulated by the Insurance Services Office, ensuring that all policies conform to the same basic standards and requirements. One benefit of this standardization is that all insurance companies are required to offer the same basic types of policies, and these policies are always referred to by the same names. This makes it very simple to switch from one insurer to another while maintaining the same level of coverage.
Standardized home insurance policies come in eight varieties, with each one being named by an HO+number designation:
HO0 – Dwelling and Fire
The most basic type of homeowner’s insurance, this limited policy provides coverage to your home against the specific perils of fire, explosions, smoke, hail, lighting, windstorm, vehicles, and civil unrest. There is no coverage for personal property, and personal liability and medical expenses are not covered.
HO1 – Basic Form
The HO1 policy form protects the dwelling against each of 11 named perils: fire, lightning, hail, windstorm, theft, vandalism, damage from vehicles and aircraft, riots and civil commotion, volcanic eruption and glass breakage. In addition to the structure of the house, the home’s contents can also be included in the policy if they are enumerated at the time the policy is written. The policy does not, however, cover floods and earthquakes, although separate flood and earthquake policies can be purchased in some areas. This policy form is not available in every state.
HO2 – Broad Form
This is a more common type of homeowner’s insurance, and it’s one of the more likely options to be offered by all insurers. Broad form coverage is a “named perils” policy, which lists all of the specific perils that are covered by insurance. Any damage caused by a non-named peril is not covered under this type of policy. In all, there are 17 perils listed on a broad form policy: the 11 covered under HO1 plus protection against falling objects, the weight of ice or snow, and malfunctioning electrical and other household equipment. Notably, flood and earthquake insurance are still not covered by this policy.
HO3 – Special Form
For homeowners looking for more comprehensive coverage, the HO3 policy is usually the right choice. This is the most comprehensive type of policy generally offered for single-family homes. Instead of it being a named-peril policy, HO3 offers “all risk” coverage that provides protection for all perils that are not explicitly excluded. Notably, flood and earthquake are still excluded perils under this policy.
HO4 – Tenant’s Form
Also called renter’s insurance, this provides protection to people who are renting homes. Rather than offering dwelling coverage, which would be handled by the landlord, this protection only covers the tenant’s personal property and personal liability. Rental insurance covers the same perils as the “contents” portion of an HO2 or HO3 policy.
HO5 – Premier
This policy is like an extended version of HO3. Unlike other homeowners policies, the HO5 policy covers both contents and dwelling on an open-peril basis; other policies require named perils for personal property. As long as the cause of damage is not excluded on the policy, any damage to the dwelling and its contents will be covered. This policy can be purchased as-is, or the same level of coverage can be achieved by adding an endorsement to an existing HO3 policy.
HO6 – Condo Insurance
Much like renter’s insurance, this is a policy primarily designed to cover personal property and personal liability. However, the coverage also extends to the walls, floors and ceiling of a condominium. All perils covered in Broad Form (HO2) homeowner’s insurance are similarly covered through condo insurance.
HO7 – Mobile Home Insurance
This policy is essentially the same as an HO3 policy, but it provides protection for mobile and manufactured homes.
HO8 – Older Houses
This is an insurance policy written for an older home that would cost more to repair than its market value. The details of the policy are similar to those of an HO3 policy, simply modified to meet the needs of the older home.