> ## Documentation Index
> Fetch the complete documentation index at: https://learn.hometrics.ai/llms.txt
> Use this file to discover all available pages before exploring further.

# Policy Types

> HO-1 through HO-8 and what each covers

Homeowners insurance policies come in standardized forms numbered HO-1 through HO-8. Each form provides different coverage levels and is designed for specific property types or situations.

Understanding policy forms helps homeowners select appropriate coverage for their property type.

## Policy Forms Overview

| Form | Name          | Property Type | Coverage Level |
| ---- | ------------- | ------------- | -------------- |
| HO-1 | Basic         | Single-family | Minimal (rare) |
| HO-2 | Broad         | Single-family | Moderate       |
| HO-3 | Special       | Single-family | Most common    |
| HO-5 | Comprehensive | Single-family | Premium        |
| HO-6 | Condo         | Condominium   | Unit owners    |
| HO-7 | Mobile Home   | Manufactured  | Mobile/modular |
| HO-8 | Modified      | Older homes   | Market value   |

<Note>
  HO-4 is renters insurance, covering personal property and liability but not the dwelling structure. Not covered in this section as it's for tenants, not property owners.
</Note>

## Named Perils vs Open Perils

Before examining each policy type, understanding the difference between named perils and open perils is essential.

<AccordionGroup>
  <Accordion title="Named perils (basic)">
    Policy lists specific covered risks. If a peril isn't named, damage from it isn't covered.

    **Basic named perils (HO-1):**

    * Fire and lightning
    * Windstorm and hail
    * Explosion
    * Riot and civil commotion
    * Aircraft damage
    * Vehicle damage
    * Smoke
    * Vandalism
    * Theft
    * Volcanic eruption

    Limited list means limited protection.
  </Accordion>

  <Accordion title="Broad named perils (HO-2)">
    Expanded list adds more covered perils:

    All basic perils plus:

    * Falling objects
    * Weight of ice, snow, or sleet
    * Accidental discharge of water or steam
    * Sudden tearing, cracking, or bulging of systems
    * Freezing of plumbing
    * Sudden damage from electrical current

    Better coverage but still limited to listed perils.
  </Accordion>

  <Accordion title="Open perils (all-risk)">
    Covers all risks except those specifically excluded. Much broader protection.

    **Common exclusions:**

    * Flood
    * Earthquake
    * War
    * Nuclear hazard
    * Government action
    * Neglect
    * Intentional damage
    * Earth movement
    * Power failure
    * Ordinance or law

    If it's not excluded, it's covered. Provides best protection.
  </Accordion>
</AccordionGroup>

## HO-1: Basic Form

<AccordionGroup>
  <Accordion title="What it covers">
    Minimal coverage protecting against 10 named perils only.

    **Dwelling:** Named perils **Personal property:** Named perils

    Offers least protection of any homeowners policy form.
  </Accordion>

  <Accordion title="Who it's for">
    Rarely used or offered today. Some insurers no longer sell HO-1 policies.

    May be available as low-cost option in limited markets or for properties that don't qualify for better coverage.
  </Accordion>

  <Accordion title="Limitations">
    * Only 10 perils covered
    * No coverage for falling objects, water damage, or many common risks
    * May not meet lender requirements
    * Minimal protection for premium savings
  </Accordion>
</AccordionGroup>

## HO-2: Broad Form

<AccordionGroup>
  <Accordion title="What it covers">
    Expanded coverage with 16 named perils.

    **Dwelling:** Broad named perils **Personal property:** Broad named perils

    Better than HO-1 but still limited to listed perils.
  </Accordion>

  <Accordion title="Who it's for">
    Homeowners seeking lower premiums than HO-3 while maintaining reasonable coverage.

    May be appropriate for lower-value homes or budget-conscious buyers willing to accept coverage gaps.
  </Accordion>

  <Accordion title="Limitations">
    * Must prove loss was caused by listed peril
    * Unusual causes of damage not covered
    * Less comprehensive than HO-3
    * Small premium savings for reduced coverage
  </Accordion>
</AccordionGroup>

## HO-3: Special Form

Most common homeowners policy. Standard coverage for most single-family homes.

<AccordionGroup>
  <Accordion title="What it covers">
    Combines open perils for dwelling with named perils for personal property.

    **Dwelling:** Open perils (all-risk) **Personal property:** Broad named perils (16 perils)

    Home structure has broadest protection. Belongings have good but more limited coverage.
  </Accordion>

  <Accordion title="Who it's for">
    Most homeowners with standard single-family homes. Default recommendation from most agents and required by most lenders.

    Balances comprehensive coverage with reasonable premiums.
  </Accordion>

  <Accordion title="Advantages">
    * Dwelling covered for almost any damage
    * Don't have to prove specific peril caused damage to structure
    * Accepted by all lenders
    * Widely available and competitively priced
  </Accordion>

  <Accordion title="Limitations">
    * Personal property only covered for named perils
    * Must prove which peril damaged belongings
    * Mysterious disappearance of items may not be covered
    * Standard exclusions still apply (flood, earthquake)
  </Accordion>
</AccordionGroup>

<Note>
  HO-3 is the most common policy type and the standard against which other policies are compared. When people refer to "homeowners insurance" they usually mean HO-3.
</Note>

## HO-5: Comprehensive Form

Premium coverage for homeowners wanting maximum protection.

<AccordionGroup>
  <Accordion title="What it covers">
    Open perils coverage for both dwelling and personal property.

    **Dwelling:** Open perils (all-risk) **Personal property:** Open perils (all-risk)

    Broadest coverage available in standard policy forms.
  </Accordion>

  <Accordion title="Who it's for">
    Homeowners with valuable belongings, those wanting comprehensive protection, and higher-value homes.

    Worth considering if you have expensive furniture, electronics, collections, or simply want fewer coverage gaps.
  </Accordion>

  <Accordion title="Advantages">
    * Broadest protection for both structure and belongings
    * Easier claims process (don't have to prove specific peril)
    * Covers mysterious disappearance of items
    * Fewer claim denials due to peril not being listed
  </Accordion>

  <Accordion title="Cost">
    Premiums typically 5-10% higher than HO-3. Additional cost buys significantly broader personal property coverage.

    May be required by insurer for high-value homes.
  </Accordion>
</AccordionGroup>

## HO-6: Condo Form

Designed specifically for condominium unit owners.

<AccordionGroup>
  <Accordion title="What it covers">
    Covers what condo association master policy doesn't.

    **Unit interior:** Walls, floors, ceilings, fixtures inside your unit **Personal property:** Your belongings **Improvements:** Upgrades you made to unit **Liability:** Personal liability coverage **Loss assessment:** Your share of association claims

    Does not cover building exterior, common areas, or structure (covered by association).
  </Accordion>

  <Accordion title="How it works with master policy">
    Condo associations carry master policy covering building structure and common areas. Your HO-6 fills gaps.

    **"Bare walls" master policy:** Association covers structure only. You insure everything inside walls, including fixtures, flooring, cabinets.

    **"All-in" master policy:** Association covers original fixtures and finishes. You insure improvements and personal property.

    Review association master policy to understand where their coverage ends and yours begins.
  </Accordion>

  <Accordion title="Loss assessment coverage">
    If association faces major loss exceeding their insurance, they may assess unit owners. Loss assessment coverage pays your share.

    Standard HO-6 includes \$1,000 loss assessment coverage. Consider increasing if association has older buildings or limited reserves.
  </Accordion>

  <Accordion title="Who it's for">
    All condominium unit owners. Required by most mortgage lenders for condo purchases.

    Even if you own outright, protects your investment and provides liability coverage.
  </Accordion>
</AccordionGroup>

<Warning>
  Condo owners sometimes assume the association's master policy covers everything. It doesn't. Without HO-6 coverage, you're unprotected for damage inside your unit, your belongings, and personal liability.
</Warning>

## HO-7: Mobile Home Form

Coverage for manufactured and mobile homes.

<AccordionGroup>
  <Accordion title="What it covers">
    Similar to HO-3 but designed for manufactured housing.

    **Dwelling:** The mobile or manufactured home structure **Personal property:** Belongings inside **Other structures:** Detached buildings on lot **Liability:** Personal liability coverage

    Coverage addresses unique risks of manufactured construction.
  </Accordion>

  <Accordion title="Special considerations">
    * Covers transport damage (if moved)
    * May cover tie-down and foundation systems
    * Addresses wind damage vulnerability
    * Some policies cover debris removal after total loss

    Coverage terms vary more than standard homeowners policies.
  </Accordion>

  <Accordion title="Who it's for">
    Owners of manufactured homes, mobile homes, and modular homes not permanently attached to foundation.

    Homes permanently attached to foundation may qualify for standard HO-3.
  </Accordion>

  <Accordion title="Availability">
    Not all insurers offer mobile home coverage. Specialized insurers focus on this market.

    May need to shop more extensively than standard homeowners.
  </Accordion>
</AccordionGroup>

## HO-8: Modified Coverage Form

Designed for older homes where replacement cost exceeds market value.

<AccordionGroup>
  <Accordion title="What it covers">
    Basic named perils with modified settlement terms.

    **Dwelling:** Named perils, settled at market value or repair cost **Personal property:** Named perils

    Does not guarantee replacement with same materials or construction quality.
  </Accordion>

  <Accordion title="Why it exists">
    Older homes often have features expensive to replicate:

    * Plaster walls and ornate moldings
    * Original hardwood throughout
    * Custom millwork
    * Historic construction methods

    Replacement cost coverage would be prohibitively expensive. HO-8 allows functional repairs without replicating original materials.
  </Accordion>

  <Accordion title="How claims are settled">
    Repairs use modern materials and methods rather than original. Functional equivalence, not exact replacement.

    **Example:** Damaged plaster walls repaired with drywall. Maintains function without matching historic construction.
  </Accordion>

  <Accordion title="Who it's for">
    Owners of older homes (typically 40+ years) where:

    * Replacement cost far exceeds market value
    * Original construction methods are expensive to replicate
    * Home doesn't qualify for standard HO-3
    * Lower premiums are priority over full replacement
  </Accordion>

  <Accordion title="Limitations">
    * Less comprehensive than HO-3
    * Named perils only
    * May not restore historic features
    * Lower coverage limits common
  </Accordion>
</AccordionGroup>

<Note>
  Owners of historic homes who want to preserve original features should discuss specialized coverage options with their agent. Some insurers offer historic home endorsements or specialty policies.
</Note>

## Choosing the Right Policy

<AccordionGroup>
  <Accordion title="Single-family home">
    **Standard choice:** HO-3

    Upgrade to HO-5 if you have valuable belongings or want fewer coverage gaps.
  </Accordion>

  <Accordion title="Condominium">
    **Required:** HO-6

    Review association master policy first to understand what you need to cover.
  </Accordion>

  <Accordion title="Mobile or manufactured home">
    **Required:** HO-7

    Shop specialized insurers for best options.
  </Accordion>

  <Accordion title="Older home">
    **Consider:** HO-8 if replacement cost is prohibitive

    Try HO-3 first. Only use HO-8 if standard coverage is unavailable or unaffordable.
  </Accordion>

  <Accordion title="High-value home">
    **Consider:** HO-5 or specialized high-value home policy

    Standard policies may have coverage limits inadequate for expensive homes. High-value policies offer broader coverage and higher limits.
  </Accordion>
</AccordionGroup>

## Policy Form Comparison

| Feature           | HO-2             | HO-3                                  | HO-5                |
| ----------------- | ---------------- | ------------------------------------- | ------------------- |
| Dwelling coverage | Named perils     | Open perils                           | Open perils         |
| Personal property | Named perils     | Named perils                          | Open perils         |
| Premium           | Lower            | Standard                              | Higher              |
| Claim burden      | Prove peril      | Structure: any; Contents: prove peril | Any cause           |
| Best for          | Budget-conscious | Most homeowners                       | Valuable belongings |

***

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