Understanding the 8 Types of Homeowners Insurance Policies (2024 Coverage Explained)
Get the right kind of coverage for your home by understanding all eight types of homeowners insurance. Over 70% of homeowners have HO-3 Special Form policies, but you have options to ensure you're fully protected. Scroll through the HO-1 Basic Form policy to the HO-8 insurance policy, and everything in-between.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
UPDATED: Jun 30, 2024
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes should be easy. This doesn’t influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.
UPDATED: Jun 30, 2024
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes should be easy. This doesn’t influence our content. Our opinions are our own.
On This Page
Your home insurance plan covers the home’s structure and your personal belongings. You can choose between replacement cost policies, which recover the full value of your items, and actual cash value policies, which consider depreciation.
Each policy, from basic HO-1 to specialized HO-8, offers varying levels of protection. For instance, some types of home insurance provide replacement coverage by default but have higher monthly rates. We can help you estimate how much home insurance costs based on where you live.
Understanding the eight types of homeowners insurance policies will help you make an informed decision. Use this guide to compare the pros and cons of each property policy, then enter your ZIP code to find affordable home insurance near you.
- All home insurance policies provide dwelling and contents coverage
- The most popular homeowners insurance policies are HO-3 Special Forms
- Home insurance endorsements protect against common policy exclusions, like floods
Your Home Insurance Policy Explained
No matter what type of policy you buy, homeowners insurance coverage is broken into two basic sections — dwelling coverage protects your home’s structure, and contents coverage protects your personal belongings, like furniture, clothing, and electronics.
What kind of damage does homeowners insurance cover? That varies by policy type. Some named peril policies only cover the damages listed in the policy and nothing else, while others have open coverage save for a few exclusions.
Read More: Best Home Insurance Companies
In general, all policies will pay for:
- Property damage or theft
- Damage to other structures, including garages and sheds
- Damage or theft of personal items in the home or garage
- Personal liability and medical payments
- Loss of use if your home is unlivable during repairs
Policies can cover either the replacement cost or actual cash value (ACV) of your property, with ACV policies being cheaper but offering lower compensation.
Compare all eight types of homeowners insurance policies below to find the best coverage for your situation.
Enter your zip code below to view companies that have cheap insurance rates.
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Understanding the Eight Types of Homeowners Insurance
What is homeowners insurance? This home policies chart breaks down the different types of coverage:
Policy Type Policy Name Policy Coverage
HO-1 Basic Form Only covers 10 named perils
HO-2 Broad Form Only covers 16 named perils
HO-3 Special Form Open coverage except for listed exclusions
HO-4 Contents Broad Form Renters insurance for personal belongings, liability, and loss of use
HO-5 Comprehensive Form Same coverage as HO-3 at replacement value
HO-6 Unit-Owners Form Condo insurance for personal belongings, liability, and loss of use
HO-7 Mobile Home Form Mobile home coverage same as HO-3
HO-8 Modified Coverage Form Historic home coverage for dwellings more than 40 years old
Scroll through the different types of property policies below for a list of coverages and exclusions.
HO-1 Basic Form Policy
This policy is bare bones and only covers these 10 named perils:
- Fire and lightning
- Smoke damage
- Wind and hail
- Aircraft damage
- Vehicle damage
- Vandalism
- Theft
- Riot and civil unrest
- Explosions
- Falling objects
The HO-1 basic form is the only home insurance policy that doesn’t offer personal liability or medical payments protection. Less than 2% of homeowners buy this policy because it doesn’t meet the insurance requirements of most mortgage lenders or homeowners associations.
HO-2 Broad Form Policy
An HO-2 policy provides a little more coverage than an HO-1. It includes the 10 perils listed above plus:
- Volcanic eruptions
- Freezing damage
- Weight of snow and ice
- Power surges
- Accidental damage to heaters and air conditioners
- Accidental discharge or overflow or water or sewage
HO-2 policies also provide dwelling and contents coverage at replacement value rather than ACV.
HO-3 Special Form Policy
This is the most popular type of homeowners insurance — over 75% of homeowners have this coverage because it’s the most flexible. Learn how to compare homeowners insurance quotes to get the best price on this policy.
Company $300,000 Policy $500,000 Policy $750,000 Policy $1,000,000 Policy
Allstate $95 $140 $185 $220
Amica $127 $165 $205 $250
Country Financial $100 $150 $190 $230
Erie $105 $145 $185 $225
Lemonade $90 $135 $175 $210
Liberty Mutual $118 $160 $200 $240
Openly $110 $155 $195 $235
State Farm $110 $150 $190 $230
The Andover $120 $160 $200 $240
USAA $194 $250 $310 $370
HO-3 automatically provides replacement coverage for your home and actual cash value for personal belongings. And as an open-peril policy, it covers all damages listed above except those explicitly excluded in the policy.
The most common exclusions to HO-3 home insurance are:
- Earthquakes
- Floods
- Nuclear waste or hazard
- Mold or fungus
- Foundation damage
- War
The exclusions will be clearly listed on your policy. You may be able to add endorsements to cover certain events and natural disasters depending on your insurance company.
HO-4 Contents Broad Form Policy
HO-4 policies are more commonly known as renters insurance. It protects against the same 16 perils but only covers a tenant’s personal belongings since they don’t own the home or structure.
Policies typically cover items at their replacement value, but this can vary by company. HO-4 insurance also provides personal liability and loss of use coverage.
HO-5 Comprehensive Form Policy
These policies are designed for high-value homes and items. It covers the same 16 perils, but coverage limits exceed normal policy levels.
HO-5 coverage add-ons aren’t typically available with standard HO-2 or HO-3 policies.
All HO-5 policies cover replacement value for structures and personal items by default, which means insurance rates are higher. This is one of the most expensive types of homeowners insurance.
HO-6 Unit-Owners Policy
HO-6 insurance is designed for condominiums. It provides personal liability, loss of use, and medical payment coverage, but also offers unique protections for walls, ceilings, and floors. Any renovations you make to the condo after you buy it are also protected.
Even if your condo association provides insurance, an HO-6 policy can fill in the gaps and allow you to choose between replacement cost coverage or ACV.
Read More: Lemonade Home Insurance Review
HO-7 Mobile Home Insurance
This is an HO-3 policy for mobile homes, providing additional coverage for trailers, manufactured or modular homes, and sectional homes. It covers any damages except those listed in the policy.
However, HO-7 coverage only applies when the home is stationary. It will not pay for any damages that occur while the home is actually mobile.
HO-8 Modified Coverage Form Policy
This type of home insurance is available for homes more than 40 years old. Most historic homes have this policy because it protects items you can’t replace easily, like vintage crown moldings or hardwood floors.
Policies only protect against 10 named perils:
- Fire and lightning
- Smoke damage
- Wind and hail
- Aircraft damage
- Vehicle damage
- Vandalism
- Theft
- Riot and civil unrest
- Explosions
- Volcanic eruption
Buying an HO-8 policy can be expensive and restrictive. If you own a historical property, research the exclusions and any endorsements you can add to your policy to be better protected.
Common Home Insurance Endorsements
How much homeowners insurance do you need? Endorsements can extend your coverage limits and protect your home against additional risks you may not have thought of, such as inflation and safety ordinances.
Check out this list of common endorsement options for homeowners:
- Earthquake Coverage: Since most policies exclude moving earth damages, this will protect your property in the event of an earthquake.
- Flood Coverage: Flood damage is a common exclusion, but this add-on protects against hurricanes, high tides, heavy rain, and other natural floods.
- Identity Theft Coverage: Home insurance policies don’t protect against the financial loss of identity theft unless you buy this endorsement.
- Service Line Coverage: Home insurance doesn’t apply to utilities, so get this add-on to protect your cable, internet, electric, sewage, and water lines.
- Inflation Guard: This endorsement calculates inflation during the term of your policy and increases coverage limits to match the value at the time of your claim.
- Ordinance Coverage: If safety ordinances changed since you bought your home, this endorsement covers repairing or replacing your property and bringing it up to code.
Adding endorsements will increase your monthly home insurance rates. Some add-ons are more expensive than others, and premiums will vary by company. Always compare insurance quotes from three or more companies to get the best price on your policy.
Bottom Line on the Different Types of Homeowners Insurance
There are eight different types of home insurance. Each policy type has unique features and coverage levels.
An HO-3 special form policy is the most common because it provides open coverage and flexibility.
The best type of homeowners insurance for high-value homes is an HO-5 policy. It provides the same open coverage as HO-3 policies but with higher coverage limits for valuable property and personal items. Rates will be higher, so determine how much home insurance costs based on where you live before you buy.
Other policies are designed for condo owners, renters, and historic homes. Enter your ZIP code below to compare the types of homeowners insurance available near you.
Frequently Asked Questions
What type of homeowners insurance coverage should you get?
How much homeowners insurance you need depends on the value of your home. Always buy a policy with enough coverage to protect at least 80% of your home’s value.
What is the most common type of homeowners insurance policy sold?
The most popular home insurance plan is an HO-3 special form. It provides open coverage except for listed exclusions, and homeowners can choose between replacement cost or ACV.
Which homeowners policy provides the most coverage?
An HO-5 Comprehensive Form policy offers the most coverage. It covers all perils (except listed exclusions) and automatically provides replacement cost coverage for repairs and replacements.
Which homeowners policy is the most basic?
An HO-1 Basic Form is the most bare-bones insurance policy. It provides only dwelling and contents coverage for 10 listed perils. Most companies do not sell this type of homeowners insurance.
What is the best type of home insurance?
The best types of homeowners insurance provide enough coverage for your home, personal belongings, and liability and medical coverage if someone is injured or killed on your property. Compare homeowners insurance quotes to find the best policy online before you buy.
What does an HO-8 homeowners policy cover?
HO-8 Modified Coverage Forms are only available for homes over 40 years old. It provides dwelling, contents, medical payments, and liability coverage but only protects against 10 listed perils: fire, smoke damage, wind and hail, aircraft damage, vehicle damage, theft, vandalism, riots, explosions, and volcanic eruptions.
What does an HO-3 not cover?
An HO-3 insurance policy doesn’t cover the exclusions listed in the policy. The most common exclusions are floods, earthquakes, war, and nuclear damage.
What is the difference between HO-3 and HO-8 insurance policy?
HO-8 insurance policies are designed for historic homes that are over 40 years old but don’t provide the same open coverage as an HO-3 policy. It only protects against 10 listed perils but with higher limits that cover the unique structures in older homes.
What is the most common damage to your home that insurance does not cover?
Flood and water damage from burst pipes (not caused by freezing) are the most common damages home insurance will not cover. Learn more in our home insurance coverage guide.
What is an HO-6 homeowners policy?
HO-6 insurance is designed for condominiums. It provides personal liability, loss of use, and medical payment coverage, and policies protect walls, ceilings, floors, and any renovations.
Who is the number one home insurance company in America?
Allstate is the largest homeowners insurance company in the U.S. Rates are around the national average at $160/mo, but compare free home insurance quotes online to find the cheapest company near you.
Which homeowners insurance company has the highest customer satisfaction?
Erie Insurance has the highest customer satisfaction according to the annual J.D. Power home insurance survey.
Enter your zip code below to view companies that have cheap insurance rates.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.