Homeowners insurance policies come in eight different forms (HO-1 through HO-8), each offering distinct coverage levels and protection types. Choosing the right policy depends on your property type, coverage needs and budget.
Home Insurance
Different Types of Homeowners Insurance
Updated: June 30, 2025
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Key Takeaways
The type of homeowners insurance determines your covered perils and reimbursement values. Your dwelling type (home, condo or mobile home) also determines the right fit for you.
Named peril policies cover only those explicitly listed, while open peril policies cover all perils except for listed exclusions.
The reimbursement method determines how much you can claim. Actual Cash Value (ACV) is based on current value, while Replacement Cost Value (RCV) is based on the replacement cost without depreciation.
Eight Types of Homeowners Insurance
Insurance Type | Definition | Dwelling Coverage | Other Structures | Personal Property | Liability Coverage | Medical Payments | Additional Living Expenses |
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(Basic Coverage) | HO-1 covers your dwelling only and doesn't include personal property, other structures or liability coverage. |
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(Broad Coverage) | HO-2 provides broad coverage, including dwelling, other structures, personal property, liability, medical payments and additional living expenses, but only for 16 named perils. |
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(Special Coverage) | HO-3 is special coverage and an open peril policy that covers dwelling, other structures, personal property, liability, medical payments and additional living expenses. |
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(Renter's Insurance) | HO-4 is a named peril policy for renters, covering personal property, liability, medical payments and additional living expenses. |
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(Comprehensive Coverage) | HO-5 offers the most comprehensive open peril coverage, making it suitable for homeowners who want extensive protection. |
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(Condo Insurance) | HO-6 is designed for condo owners and covers dwelling improvements, personal property, liability, medical payments and additional living expenses. |
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(Mobile Home Insurance) | HO-7 covers mobile homes, offering financial protection for the dwelling, other structures, personal property, liability, medical payments and additional living expenses. |
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(Older Home Insurance) | HO-8 is a named-peril policy designed for older homes, covering dwelling, liability, medical payments and additional living expenses. |
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What Is HO-1 Insurance?
An HO-1 policy, also known as a Basic Form policy, is the most basic form of homeowners insurance and covers 10 named perils.
Perils are potential causes of loss or damage to your property. They encompass a wide range of events, from natural disasters to human-made incidents, that could lead to financial loss or destruction. HO-1 insurance covers a limited set of perils, offering protection against the following events:
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Aircraft
- Vehicles
- Smoke
- Vandalism
- Theft
- Falling objects
Basic policy forms like HO-1 are no longer commonly offered by insurance companies. As of 2021, just 1.81% of homeowners held an HO-1 policy, according to data from the National Association of Insurance Commissioners. Homeowners often seek more comprehensive coverage options that provide protection against a broader range of risks.
What Is HO-2 Insurance?
HO-2 insurance, often referred to as a Broad Form policy, is an extended version of HO-1 insurance. This type of insurance protects against all the perils covered under HO-1 insurance, plus an additional six named perils. These additional perils include:
- Weight of ice, snow or sleet
- Accidental discharge or overflow of water or steam
- Sudden and accidental tearing apart, cracking, burning or bulging of built-in appliances like water heaters or central air conditioning/heating systems
- Freezing
- Sudden and accidental damage from artificially generated electrical currents, such as power surges
- Volcanic eruption
Similar to HO-1 insurance, HO-2 insurance is not a popular option. According to data from the National Association of Insurance Commissioners, approximately 6.41% of homeowners hold an HO-2 policy.
What Is HO-3 Insurance?
HO-3 insurance is the most common type of home insurance policy, purchased by approximately 78.16% of homeowners. It's an open peril policy that offers comprehensive coverage. This means you're covered against a wide range of risks, except those specifically excluded in the policy. HO-3 also offers protection for the perils listed under both HO-2 and HO-1 insurance.
HO-3 insurance typically includes:
- Dwelling coverage: Your dwelling is covered at its replacement cost, ensuring you can rebuild your home from the ground up in case of a covered loss.
- Personal property coverage: HO-3 typically covers personal property at its actual cash value by default, but replacement cost endorsements are available for an additional cost.
- Liability coverage: This coverage safeguards you if someone gets injured on your property and sues you.
- Loss-of-use coverage: This helps cover your living expenses if your home becomes uninhabitable due to a covered event.
HO-3 insurance provides comprehensive financial protection for most homeowners' needs, covering your home, belongings and liability concerns.
HO-3 Policy Exclusions
While an HO-3 insurance policy offers comprehensive coverage, certain events and situations fall outside its scope. These exclusions are standard and reflect the limits of the policy. Here are common exclusions in an HO-3 policy:
Common HO-3 Exclusions
- Damage caused by ordinance and law regulations
- Losses resulting from earth movement, such as earthquakes
- Water damage from flooding, sewer backups or water seepage
- Vandalism or malicious mischief, particularly if the home was vacant for more than 60 days
- Damage from mold, fungus or wet rot, unless linked to accidental water discharge or overflow
- Losses incurred during times of war or military conflict
- Losses resulting from intentional actions
- Losses due to government actions or regulations
- Theft of a dwelling under construction
- Losses caused by power failures
- Damage due to neglect or lack of proper upkeep
- Wear and tear, depreciation over time
- Mechanical breakdown of appliances or systems
- Damage from smog, rust or corrosion
- Smoke damage from agricultural or industrial operations
- Damage from the discharge, dispersal or seepage of pollutants
- Damage due to settling, shrinking, bulging or expansion of structural components
- Damage caused by nuclear hazards
- Losses caused by birds, vermin, rodents or insects
- Damage caused by animals owned by the insured
What Is HO-4 Insurance?
HO-4 insurance, known as renters insurance, is a named peril policy specifically designed for renters. Renters insurance differs from home insurance in that it doesn't include dwelling coverage. Instead, it focuses on personal property coverage, protecting your possessions against a wide array of unexpected events.
HO-4 insurance also includes liability coverage, which becomes important if a guest sustains an injury while visiting your rented space and sues you. Additionally, it includes loss of use coverage, which helps cover costs if your rental unit becomes uninhabitable due to a covered event and you need temporary shelter.
What Is HO-5 Insurance?
HO-5 insurance is the most comprehensive form of home insurance available. Under an HO-5 policy, both dwelling coverage and personal property are insured at replacement cost, allowing you to rebuild and replace without depreciation. This distinction sets HO-5 apart from other policies where replacement cost coverage might be an optional add-on.
Homeowners often buy HO-5 policies for high-value properties in high-risk areas. These policies address the unique needs of properties that require extra protection due to their value and exposure to potential hazards. Whether it's your cherished heirlooms, state-of-the-art appliances or luxurious finishes, HO-5 insurance provides coverage against a wide range of perils that could threaten your home and belongings.
HO-5 insurance costs more than other policies but offers the most comprehensive financial protection available.
HO-3 vs. HO-5 Insurance
There are key distinctions between HO-5 and HO-3 policies that affect which policy you might choose.
Aspect | HO-5 Policy | HO-3 Policy |
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Dwelling Coverage | Provides replacement cost for both dwelling and personal property coverage. | Offers replacement cost for dwelling coverage and actual cash value for personal property. Homeowners can get replacement cost for personal property for a higher premium. |
Coverage Approach | Open perils for both dwelling and personal property. | Covers open perils for your home and named perils for personal property. |
High-Value Items | Higher coverage limits for valuable items like jewelry and electronics, with typically strict limits. | Limited coverage for expensive items such as jewelry, furs and electronics. |
Best For | Homeowners with high-value properties and those requiring comprehensive protection. | Homeowners who need varying degrees of personal property coverage. |
What Is HO-6 Insurance?
HO-6 insurance, commonly referred to as condo insurance, is tailored for condo owners. It covers your personal belongings and upgrades you've made within your unit, such as custom fixtures. HO-6 insurance includes dwelling, personal property, liability and loss of use coverage, designed for condo owners' specific needs.
What Is HO-7 Insurance?
Otherwise known as mobile home insurance, HO-7 insurance protects your purchase of a mobile home or trailer. It's an open peril policy specifically designed to safeguard the structure of your mobile home or trailer, offering comprehensive protection similar to HO-3 insurance. This insurance type covers various kinds of mobile homes, including:
- Trailers
- Travel trailers
- Fifth-wheel trailers
- Modular homes
- Park model homes
- RVs
- Single-wide and double-wide manufactured homes
- Single-wide and double-wide mobile homes
- Sectional homes
An HO-7 policy typically covers your mobile home when it is stationary and does not extend coverage while it is in transit.
What Is HO-8 Insurance?
HO-8 insurance is designed specifically for older homes and offers customized protection for homes with special characteristics, such as historic properties and landmarks. It's best for properties where the cost to rebuild exceeds the market value.
HO-8 insurance provides coverage for named perils, similar to HO-1 insurance. It also includes liability coverage, medical payments to others and additional living expenses.
Types of Homeowners Insurance Policies by Perils
In home insurance, there are two key terms you'll often see: named perils and open perils. Perils are specific risks or events that could cause damage or loss to your property. They range from natural disasters like fires and earthquakes to human-made incidents like theft or vandalism.
Home insurance policies outline which perils your policy covers. Your choice between named peril and open peril policies depends on your risk tolerance, budget and coverage preferences.
Named Peril vs. Open Peril Policies
The table below compares named peril and open peril policies to help you understand these options and make an informed decision that aligns with your needs and financial goals.
Aspect | Named Peril | Open Peril |
|---|---|---|
Definition | A named peril policy explicitly lists the perils that are covered. If a peril isn't listed, it's not covered. | An open peril policy covers all perils except those explicitly excluded in the policy. |
Best For | Homeowners seeking more budget-friendly coverage. | Homeowners who want more comprehensive coverage for their homes and belongings. |
Where You Find It | HO-1, HO-2, HO-4, HO-8 | HO-3, HO-5, HO-6, HO-7 |
Types of Homeowners Insurance Coverage by Reimbursement Method
You may encounter two types of home insurance coverage: Actual Cash Value (ACV) and Replacement Cost Value (RCV), which determine how your insurance provider calculates the value of your possessions and your coverage level. Choosing between ACV and RCV depends on your priorities.
Actual Cash Value vs. Replacement Cost Value
If you're looking for more budget-friendly coverage, ACV might be suitable. However, if you want to replace your belongings without depreciation costs, RCV offers more comprehensive protection.
Understanding ACV and RCV helps you choose coverage that fits your needs and financial goals. The table below summarizes the main characteristics of each type to help you choose.
Aspect | Actual Cash Value (ACV) | Replacement Cost Value (RCV) |
|---|---|---|
Definition | ACV is the current value of your property or belongings, accounting for depreciation over time. With a covered loss, your insurance payout reflects the value your items have lost since their purchase. | RCV covers the cost of replacing your property or belongings with items of similar quality and functionality. RCV coverage reimburses you for new items without depreciation. |
Claim Payout | Lower payouts due to the decreased value of your belongings. | Higher payouts covering the full cost of replacing your items with new ones. |
Suitability for Policies | ACV is often found in basic policies, like HO-1. | RCV is more common in comprehensive policies, such as HO-3 and HO-5. |
What Type of Homeowners Insurance Should You Get?
Your insurance choice should reflect your lifestyle and living situation. Homeowners can get comprehensive protection with HO-3 insurance, while renters and condo dwellers need HO-4 and HO-6 insurance for their specific coverage needs.
Choose coverage that aligns with your priorities. Homeowners focus on protecting their property investments, while renters and condo residents focus on safeguarding personal property. Selecting the right insurance type ensures you have appropriate protection for your situation.
What Home Insurance Covers: Common Coverages Included
Whether you're a homeowner, condo dweller or mobile home owner, understanding available protections is important. These core coverages help you select the right home insurance for your needs.
Dwelling Coverage
Dwelling coverage protects your home's structure from covered perils. This coverage includes the main building and key components such as walls, floors and roofing. If a fire damages your home, dwelling coverage helps pay for structural repairs.
Other Structures
This coverage extends beyond your main dwelling to include other structures on your property, such as detached garages, sheds or fences. If a storm damages your detached garage, this coverage helps pay for repairs or rebuilding.
Personal Property
Personal property coverage protects your belongings, including furniture, electronics, clothing and more. When covered perils like theft or vandalism occur, this coverage helps replace or repair your possessions.
Liability Coverage
Liability coverage helps if you're legally responsible for injury to others or damage to their property. If a guest slips and gets injured on your property, liability coverage can pay medical expenses and legal fees.
Medical Payments to Others
This coverage assists in paying medical expenses for guests injured on your property, regardless of fault. If someone falls on your driveway and needs medical attention, this coverage helps pay their medical bills.
Additional Living Expenses
When covered damage makes your home unlivable, your insurance helps pay for hotels, meals and other living expenses until you can move back in. After a fire, you won't pay out of pocket for temporary housing while contractors rebuild.
Different Types of Home Insurance: Bottom Line
There are eight types of homeowners insurance policies, from HO-1 through HO-8, each tailored to meet specific coverage needs. These insurance types differ in their approaches to covered perils and reimbursement values, along with the availability of personal property, liability and loss-of-use coverage. Each type serves different property types and coverage preferences.
Selecting the right policy requires understanding the different types of homeowners insurance and your specific needs. This ensures your coverage fits your living situation and priorities.
Home Insurance Policy Types: FAQ
Below are answers to frequently asked questions about homeowners insurance policy types, including common coverage forms and what each includes to help determine the right fit for your home.
What are the different types of homeowners insurance?
Homeowners insurance comes in eight forms, from HO-1 to HO-8. Each form offers different coverage levels depending on the property type and use.
What is the best type of homeowners insurance for you?
The best type of policy varies based on your home's structure, value and risk tolerance. For example, HO-3 is often suitable for most homeowners. HO-5 may be better if you want broader financial protection for personal belongings and fewer coverage restrictions.
What is the most common homeowners insurance form?
HO-3 is the most common homeowners insurance form. It offers open peril coverage for the dwelling and named peril coverage for personal property, making it a standard choice for single-family primary residences.
Can you decide whether your homeowners insurance will have named peril or open peril?
In most cases, peril type is tied to the policy form your insurer offers. However, some insurers may allow you to customize certain coverage sections, such as choosing open peril for the structure and named peril for contents, or adding endorsements for broader protection. Ask your insurer to verify your options.
Different Types of Homeowners Insurance Policies: Our Review Methodology
Why Trust MoneyGeek?
MoneyGeek analyzed quotes from multiple insurance providers across the U.S. using a profile that reflects the average homeowner. By considering different locations and companies, we aim to give a reliable estimate of what homeowners can expect to pay — showing why it’s important to compare rates.
Methodology
MoneyGeek evaluated homeowners insurance carriers incorporating insights and premiums from the official databases of Quadrant Information Services.
Homeowner Profile
For our analysis, we created a sample homeowner profile with the following characteristics.
- Good credit score (769–792)
- Home constructed in 2000
- Wood-frame construction
- Composite shingle roof
Homeowners Insurance Coverage Details
Unless otherwise specified, we used the following coverage limits to collect quotes for our comparison:
- $250,000 in dwelling coverage
- $125,000 in personal property coverage
- $200,000 in personal liability coverage
- $1,000 deductible
We also compiled data for policies with broader coverage to determine the best companies for insuring expensive homes, upping limits to $1 million in dwelling coverage, $500,000 in personal property coverage and $1 million in liability coverage.
Home Insurance Types: Related Pages
Home Insurance
Home Insurance
Renters Insurance
Home Insurance
Home Insurance
Home Insurance
Home Insurance
Home Insurance
Mortgage
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
sources
- National Association of Insurance Companies. "Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unite Owner’s Insurance Report: Data For 2021." Accessed June 30, 2025.