Home Insurance Policies

There are eight standard types of home insurance policies, and they differ according to the scope of coverage provided and to the type of dwelling which they insure. A home insurance policy document is called a Form, and the eight standard policy forms have designated abbreviations ranging from HO-1 to HO-8 ('HO' meaning 'Home Owners').

Each policy form specifies which perils are covered. A peril is an insurance term for an event which causes harm, damage or loss. Home insurance policies will only pay out if harm, damage or loss is caused by a peril, and only if the peril is specified as being covered under the policy. Some perils, such as flood and earthquake damage, are not covered under standard form policies, and need to be separately or additionally insured.

The eight standard types of home insurance policies are detailed as follows:

Basic Home Insurance Policy (HO-1)

A basic home insurance policy provides protection against 10 specified perils:

1. Fire or lightning.
2. Smoke.
3. Explosion.
4. Windstorm or hail.
5. Theft.
6. Vandalism and malicious mischief.
7. Damage caused by vehicles.
8. Damage caused by aircraft.
9. Riot or civil commotion.
10. Volcanic eruption.

Basic home insurance policies provide such a restricted scope of coverage, however, that they are no longer offered in most states.

Broad Home Insurance Policy (HO-2)

A broad home insurance policy provides protection against the 10 perils covered by a basic policy (detailed above), plus the following six additional perils:

1. Falling objects.
2. Weight of ice, snow or sleet.
3. Freezing of plumbing, heating or air conditioning systems, or of a fire sprinkler system or domestic appliance.
4. Accidental discharge, leakage, or overflow of water or steam from within a plumbing, heating, or air conditioning system or domestic appliance.
5. Sudden breakage, cracking, burning, or bulging of a steam or hot water heating or air-conditioning system, or of a fire sprinkler system.
6. Sudden and accidental damage from artificially-generated electrical currents (excluding tubes, transistors and similar components).

Special Home Insurance Policy (HO-3)

A special home insurance policy differs from other forms of coverage in that, if the peril is not specifically excluded by the policy, then it's covered. For this reason an HO-3 is the most popular type of home insurance policy.

All 16 perils specified in an HO-2 policy are included within an HO-3 policy. Specified exclusions are ordinance or law, earth movement, water damage (including flood), power failure, neglect, war, nuclear hazard, intentional loss and governmental action.

The Insurance Information Institute has a sample Special Home Insurance form (pdf).

Renters Insurance Policy (HO-4)

A renters insurance policy, also referred to as a Tenants Form, covers personal property for the same 16 perils specified in HO-2 and HO-3 policies. As tenants do not own the home they live in, coverage is not included for the structure of the dwelling or for other structures on the property, or for loss of use.

Comprehensive Home Insurance Policy (HO-5)

A comprehensive home insurance policy consists of an HO-3 policy with an HO-15 endorsement. This means that, in addition to all the coverage provided by an HO-3 policy, personal property is covered on the basis that, if it's not excluded, it's covered. This is the most comprehensive type of home insurance policy available.

Condo Insurance Policy (HO-6)

A condo insurance policy covers the same perils specified in an HO-2 policy, but the dwelling coverage only extends to those parts of the structure owned by the insured. Condo insurance is available on a basis similar to that of an HO-5 policy, to the extent that perils which are not specifically excluded are covered.

Mobile Home Insurance Policy (HO-7)

A mobile home insurance policy is designed specifically for manufactured and modular homes, and it provides coverage of a similar scope to that of HO-2 policies. Mobile home insurance can also be effected on an HO-5 basis, providing coverage for all perils which are not specifically excluded.

Modified Home Insurance Policy (HO-8)

A modified home insurance policy is designed specifically for owner-occupiers of older homes. Coverage is similar in nature to the 10 named perils of an HO-1 policy, but the dwelling is always insured for its market value instead of its replacement value. This recognizes the fact that the replacement value of older homes invariably exceeds their market value. Coverage is available on a basis similar to that of an HO-5 policy, in that perils which are not specifically excluded are covered.