The 8 Types of Homeowners Insurance

Evelyn Long

Jul 23, 2021


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Do you know which homeowners insurance policy to purchase? There may be a little confusion involved — especially when you realize you have options. It’s smart to learn more about each alternative so that you make a good decision. The eight types of homeowners insurance cover varied factors that apply to different situations.

Here’s a quick guide on the types of homeowners insurance to help you understand every choice.

1. HO-1 (Basic)

An HO-1 insurance policy covers basic necessities. Essentially, it’s coverage that addresses barebones issues. An HO-1 will secure your home and belongings at their actual cash value. This process includes depreciation and other factors, so you’ll likely receive less than what you paid for them. Additionally, your HO-1 policy covers specifically named perils:

  • Fire or lightning
  • Windstorms or hail
  • Explosions
  • Riot or civil commotion
  • Aircraft damage
  • Vehicle damage
  • Smoke
  • Vandalism
  • Theft
  • Volcanic eruptions

If you experience any other event, you won’t be able to tap into your HO-1 for coverage. Read any fine print before you choose an HO-1. Your policy could have specific definitions that you’ll need to understand further.

2. HO-2 (Broad)

This option reaches further than your standard HO-1 policy. That’s because a Broad form covers your home and belongings differently. Your home will be evaluated at its replacement costs while your belongings will be covered by their actual cash value. You can recover a bit more money as a result. It protects against six additional named perils:

  • Falling objects
  • Heavy snowfall, ice or sleet
  • Accidental discharge or overflow of water or steam
  • Sudden and accidental bulging, cracking or burning of a household system or appliance
  • Freezing of a household system or appliance
  • Sudden and accidental electrical damage

Your HO-2 may provide personal liability coverage, too. The types of homeowners insurance for an HO-2 can be slightly adjusted depending on your provider.

3. HO-3 (Special)

An HO-3 will cover any peril unless otherwise stated by your insurance provider. This open-peril policy typically excludes earthquakes, war, neglect, mold and more. Its exceptions vary. Like with an HO-2, your house will be covered at its replacement value, and your belongings will be covered at their actual cash value.

4. HO-4 (Tenant)

An HO-4 policy applies to renters. You’ll want to use a Contents Broad form if you lease rather than buy. Through an HO-4, you’ll be able to protect your personal items from damage because you don’t own your home. You can also pursue coverage for additional living expenses when destruction forces you to move. An HO-4 will help you with all 16 named perils.

5. HO-5 (Comprehensive)

This plan allows for open-peril coverage for both your home’s structure and your personal belongings. It works like an HO-3, but you’ll be able to receive money for an item’s replacement value rather than its actual cash value. There are also extended limits for certain expensive objects.

6. HO-6 (Unit-Owners)

A Unit-Owners form helps condominium or co-op residents. It covers all 16 named perils. Your building has a master policy that covers exterior and common spaces, but your individual homeowners insurance protects your specific unit. Your HO-6 will depend on what your condominium or co-op already protects through their plan. It’s a bit more complicated than renter’s insurance because you own your unit.

7. HO-7 (Mobile Home)

An HO-7 protects various mobile and manufactured homes. These entities include single- and double-wide trailers, RVs and more. It’s like an HO-3, but you’ll get more precise coverage for these properties since they differ from traditional single-family houses. The types of homeowners insurance for mobile homes vary depending on your wants and needs. For instance, you can pursue an open-peril HO-7.

8. HO-8 (Modified Coverage)

You’ll want to pursue an HO-8 if you own a home that doesn’t meet specific insurer standards. For example, it is likely for an older house to qualify for an HO-8. Its age means it’s at a higher risk for certain damages. Those repairs will often cost more because you need to source certain parts and materials. An HO-8 policy covers 10 perils, like an HO-1 plan. The payouts reflect your home’s actual cash value.

Learn About the Types of Homeowners Insurance to Make a Smart Decision

The types of homeowners insurance may seem a bit difficult to understand. However, with a little information, you can make a wise decision for your family. Use these points to be as knowledgeable as possible when it’s time to buy your own policy.

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