Homeowners insurance is one of those things most people buy and then forget about—that is, until they need it. Choosing the right type of homeowners insurance can save you when disaster strikes.
There are eight different types of homeowners insurance, and it’s important to understand what they are when insuring your home. But how do you determine the correct category or type of insurance?
How to Determine Types of Insurance
To determine the right type of homeowners insurance, you must consider the type of property you own. For example, some properties could be:- single-family homes
- condos
- mobile homes
- rentals
- historical homes
Below are the different types of property insurance.
HO-1 Basic Policy
An HO-1 policy provides you with basic coverage for the dwelling. It only covers the house’s structure as well as other eligible structures, such as a garage, fence, or deck.Although the basic structure is covered, your personal property does not have coverage. You won’t have insurance for your belongings or liability coverage. It is also a named peril policy. That means you won’t have coverage unless the disaster is explicitly named on the policy.
HO-2 Broad Policy
An HO-2 broad policy extends coverage to protect not only your house’s structure but also your personal property. It includes liability insurance.But the HO-2 is also known as a named peril coverage policy. This means that only the perils named in the policy will be covered. This could be limiting since if you experience a peril not named on the policy, you won’t have coverage.
HO-3 Standard Policy
The HO-3 policy is the most common type of homeowners insurance. According to Hippo Insurance, in 2022, 79.9 percent of homeowners had HO-3 policies on their homes.It’s a comprehensive policy that protects the structure and personal belongings. It also covers liability. You and your family members are protected against any covered loss.
The HO-3 standard follows an open peril policy. That means that your structure and belongings are covered against any perils not specifically named in your policy as exclusions.
There are some exclusions, so it’s important to read your policy for details.
HO-4 Renters Insurance
The HO-4 is specifically for renters. It insures the property and belongings owned by the tenant. It also provides liability insurance. It doesn’t offer any dwelling coverage since the renter doesn’t own the building. Typically, an HO-4 renters policy provides named peril coverage for the tenant’s personal property.It can also pay for lodging and other living expenses should the rental become uninhabitable.
HO-5 Comprehensive Insurance
The HO-5 is a more comprehensive homeowners insurance policy. It provides open peril (all-risk) coverage on your dwelling and personal property. That means you are protected against perils unless they are specifically listed as an exclusion on the policy.This comprehensive insurance offers the broadest coverage but isn’t offered by most insurance companies.
HO-6 Condo
Condo or HO-6 insurance is designed for those who own a unit in a condominium or co-op building.As a condo owner, you don’t own the building like a single-family home. The HO-6 provides limited protections for certain areas of the building as well as personal belongings and liability coverage.
This coverage is designed to be held in conjunction with a shared policy purchased through the building owners’ association.
An HO-6 offers named peril coverage. It also covers areas of the building where the condo owner has an insurable interest. Because of this, it’s important to know what protection the building owner provides. You don’t want gaps in your coverage, but you also don’t want to pay double for coverage already being offered.
HO-7 Mobile Homes
An HO-7 policy for mobile homes is similar to a HO-3 standard policy. It includes open peril coverage for recreation vehicles (RVs), mobile homes, and trailers. Open perils means all risks are covered unless explicitly excluded in the policy.Mobile home insurance coverage is a bit more limited for personal property. It runs on a named peril basis and varies by insurer.
HO-8 Historic Homes
Historical or older homes may have ornate features that may be difficult or costly to replace. The HO-8 provides coverage for times when a home’s repair or replacement cost exceeds market value. This often happens with older or historic homes.HO-8 insurance is covered on a named perils basis. Unfortunately, it only covers 10 perils.
If a named peril damages your home, the policy typically pays out the cash value of the structure of your home and personal belongings instead of its replacement cost.
Know Your Homeowners Insurance Needs
The best way to determine which category or type of policy you need is to sit down with an insurance agent. It’s important to have the right coverages in place so there aren’t any surprises at the time of a loss.The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
