8 Types of Homeowners Insurance

Home insurance policies come in eight forms. Each covers different property types and perils. HO-3 covers about 79% of single-family homes nationwide, according to the National Association of Insurance Commissioners (NAIC). Most insurers offer multiple policy types.

See also: Best Homeowners Insurance Companies

HO-1 is the most basic and limited type of homeowners insurance. It's a named-perils policy covering your home for 10 specific hazards:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damage caused by aircraft
• Damage caused by vehicles not owned by the policyholder
• Smoke
• Vandalism or malicious mischief
• Theft
• Volcanic eruption

An HO-1 policy insures your dwelling at actual cash value (ACV). Claim payments reflect depreciation.

HO-2 insurance expands on HO-1, covering 16 perils. It includes the six standard coverage types: dwelling, other structures, personal property, personal liability, medical payments and loss of use. The six additional perils include:

• Falling objects
• Weight of ice, snow or sleet
• Accidental discharge or overflow of water or steam
• Sudden tearing, cracking or bulging of a heating or plumbing system
• Freezing of plumbing or household appliances
• Sudden damage from artificially generated electrical current

An HO-2 policy insures the dwelling at replacement cost value (RCV), paying the amount needed to rebuild or repair your home with new materials.

Like HO-1, HO-2 remains an uncommon choice due to its limited financial protection.

HO-3 is the most common type of homeowners insurance and balances coverage with cost. It's an open-peril policy for your dwelling and other structures, covering any cause of damage except those specifically excluded. This differs from HO-1 and HO-2, which cover only named perils.

Beyond dwelling coverage, HO-3 policies include standard protections for personal property, loss of use, liability and medical payments.

Under an HO-3 policy, the dwelling and other structures are insured at replacement cost value (RCV), paying the full cost to rebuild or repair your home with new materials without depreciation. Personal property is covered at actual cash value (ACV) by default, though some insurers let you upgrade to RCV coverage for an additional premium.

Commonly Excluded Perils in HO-3 Insurance

• Flooding
• Earthquakes
• Landslides or mudslides
• Sewer or drain backups
• Neglect or poor maintenance
• Pest or rodent damage
• Mold or fungus growth
• Wear and tear or deterioration
• Government action or ordinance enforcement
• War or nuclear hazard

HO-3 policies are the industry standard for single-family homes, accounting for about 79% of homeowners insurance policies nationwide, according to the NAIC.

HO-4 insurance, known as renters insurance, is a named peril policy specifically designed for renters. Unlike HO-1 through HO-3 policies, renters insurance doesn't cover the building itself — that's the landlord's responsibility. Instead, HO-4 protects a renter’s personal belongings, liability and additional living expenses if the unit becomes uninhabitable after a covered loss.

It covers the same 16 hazards listed under an HO-2 policy, and personal property is insured at actual cash value (ACV) by default, though many insurers offer the option to upgrade to replacement cost value (RCV) coverage for more complete protection.

Since renters don't need dwelling coverage, HO-4 insurance is more affordable. The average cost of renters insurance is $12 per month. The average cost of an HO-3 policy is $296 per month.

HO-5 offers the broadest coverage. It’s an open-peril policy for both the dwelling and personal property, meaning it covers all causes of loss except those specifically excluded. 

HO-5 policies are ideal for homeowners with newer or higher-value homes, or those who want maximum protection with fewer coverage gaps. HO-5 policies also include standard protections for liability, loss of use and medical payments, similar to HO-3, but with higher limits and fewer restrictions.

Because of its broad coverage and higher claim limits, HO-5 insurance is more expensive than HO-3 policies, but it provides stronger financial protection. According to NAIC, HO-5 policies accounted for about 12% of all homeowners insurance policies written in 2022.

HO-6 insurance, also known as condo insurance, is designed for condominium owners. It covers repair costs for the portions of the unit you're responsible for, which is everything inside the walls. Unlike HO-3 insurance, the condo association's master policy covers the building's structure and shared areas, while HO-6 fills the gap by covering the interior of the unit, personal property, liability and loss of use.

What’s included in an HO-6 policy:

• Interior structures and finishes (walls, floors, cabinets, etc.)
• Personal belongings
• Liability protection for accidents inside the unit
• Loss of use if the condo becomes uninhabitable
• Medical payments for guest injuries

Coverage under an HO-6 policy includes named perils similar to those in an HO-2 policy, such as fire, theft, vandalism and water damage from plumbing issues. The dwelling portion covers features like walls, floors, ceilings, built-in cabinets and fixtures. Personal property is insured at actual cash value (ACV) by default, though policyholders can upgrade to replacement cost value (RCV) coverage.

HO-7 insurance is designed for mobile and manufactured homes that aren't eligible for standard HO-1 through HO-5 policies. It functions like an HO-3 policy, offering open-peril coverage for the dwelling and named-peril coverage for personal property.

HO-7 insurance applies to factory-built or prefabricated homes moved to a permanent site. These include:

• Manufactured homes built after June 15, 1976, that meet U.S. Department of Housing and Urban Development (HUD) construction standards
• Mobile homes built before that date, as long as they're anchored and used as primary residences
• Modular homes assembled in sections off-site and attached to a foundation on delivery
• Tiny homes on permanent foundations that meet local zoning and building codes

The policy pays for damage to your home's structure, attached fixtures (like decks or porches) and personal belongings caused by fire, theft and wind.

HO-8 insurance is for older or historic homes whose replacement cost exceeds their current market value. HO-8 policies pay claims based on actual cash value (ACV) instead of replacement cost value.

Coverage under an HO-8 is named peril, protecting against the same 10 hazards listed under an HO-1 policy.

An HO-8 policy applies to:

• Homes more than 40 years old
• Historic properties or custom-built structures
• Homes that don’t meet current building codes

HO-8 works for homeowners seeking to preserve unique or historic structures. Based on the NAIC's study, HO-8 policies made up just 0.32% of all homeowners insurance policies written in 2022.

Here is a home insurance policy comparison chart to help you decide which is right for you.

• Named peril policies (HO-1, HO-2, HO-4, HO-8) list specific covered events. If damage isn't from a listed peril, you're not covered. Standard named perils include fire, lightning, windstorms, hail, explosions, theft, vandalism and vehicle damage.
• Open peril policies (HO-3, HO-5, HO-6, HO-7) cover all damage except specifically excluded events. Common exclusions include floods, earthquakes, normal wear and tear, government action and intentional damage. Open peril policies provide broader protection.

Named peril policies require you to prove that damage came from a covered event. Open peril policies assume coverage unless the insurer can prove an exclusion applies. Open peril coverage costs more but offers fewer coverage gaps.

• Replacement cost value (RCV) pays the cost to replace damaged items with new, similar quality items. A five-year-old $1,200 refrigerator would be replaced with a new $1,200 model.
• Actual cash value (ACV) pays your property's current value minus depreciation. That same refrigerator might only be worth $600 after depreciation, so that's what you'd receive.

Most dwelling coverage uses replacement cost, but personal property often defaults to actual cash value. You can upgrade personal property to replacement cost for higher premiums. Replacement cost coverage eliminates out-of-pocket costs when replacing belongings, while actual cash value requires you to pay the difference between depreciated value and replacement cost.

Homeowners insurance comes in eight types: HO-1 through HO-8. HO-3 covers about 79% of single-family homes nationwide, according to the NAIC, balancing coverage breadth with cost. HO-5 offers the broadest financial protection with open-peril coverage for dwelling and personal property.

HO-4, HO-6 and HO-7 policies address the needs of renters, condo owners and mobile homeowners, while HO-8 offers a practical choice for owners of older or historic homes.