8 Types of Homeowners Insurance

Home insurance policies come in eight different forms, each designed for specific housing situations and coverage needs. HO-3 is the most common type, covering about 79% of single-family homes nationwide according to the National Association of Insurance Commissioners (NAIC). The best home insurance companies typically offer multiple policy types, allowing you to choose coverage that matches your property and budget.

HO-1 is the most basic and limited type of homeowners insurance. It’s a named-perils policy that protects your home’s structure from 10 specific hazards, including:

• 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), which means claim payments reflect depreciation — you’ll receive the home’s current value, not the amount needed to rebuild it today. Because it covers only these listed perils, any damage caused by an unlisted event isn’t covered. This policy also excludes personal property, liability and additional living expenses, offering minimal protection overall.
Given its narrow coverage, providers rarely offer this type of home insurance. According to the NAIC's most recent data, only 1.8% of written policies were HO-1 in 2022.

HO-2 insurance is a broader form of HO-1 insurance, covering 16 perils instead of ten, and includes the six standard coverage types: dwelling, other structures, personal property, personal liability, medical payments and loss of use. The six additional covered 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), meaning it pays the amount needed to rebuild or repair your home with new materials, without deducting for depreciation. Personal property, however, is covered at actual cash value (ACV). The policy also includes liability and loss of use coverage, giving homeowners more well-rounded protection while remaining relatively affordable.

Similar to HO-1 insurance, HO-2 insurance is an unpopular choice due to its limited financial protection, making up only 6.51% of single-family home insurance policies countrywide.

HO-3 is the most common type of homeowners insurance and offers a strong balance between coverage and cost. It’s an open-peril policy for your dwelling and other structures, meaning it covers any cause of damage except those specifically excluded in the policy. This differs from HO-1 and HO-2, which cover only named perils.

In addition to dwelling coverage, HO-3 policies include standard protections for personal property, loss of use, liability and medical payments, offering comprehensive protection for most homeowners.

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 using new materials, without depreciation. Personal property, on the other hand, is usually covered at actual cash value (ACV), though some providers allow you to upgrade to RCV coverage for an additional premium.

Usually 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 78.99% 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 differs from home insurance in that it doesn’t insure the building itself, as 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 tends to be more affordable. The average cost of renters insurance is $12 per month, while the average cost of an HO-3 policy is $296 per month.

HO-5 offers the highest level of protection available in standard homeowners insurance. It’s an open-peril policy for both the dwelling and personal property, meaning it covers all causes of loss except those specifically excluded. This makes it broader than an HO-3, which provides open-peril coverage only for the structure and named-peril coverage for personal property.

HO-5 policies are ideal for homeowners with newer or higher-value homes, or those who want maximum protection with fewer coverage gaps. They also include standard protections for liability, loss of use and medical payments, much like 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 more peace of mind. According to NAIC, HO-5 policies accounted for about 12.38% of all homeowners insurance policies written in 2022.

HO-6 insurance, also known as condo insurance, is designed for condominium owners. It protects the portions of the unit you’re responsible for, which is often everything inside the walls. Unlike HO-3 insurance, the condo association’s master policy is responsible for 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 of an HO-6 covers features like walls, floors, ceilings, built-in cabinets and fixtures. Personal property is usually insured at actual cash value (ACV) by default, though policyholders can often upgrade to replacement cost value (RCV) coverage.

HO-7 insurance is designed for mobile and manufactured homes, which often aren’t eligible for standard HO-1 through HO-5 policies. It functions much 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 that are 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 are anchored and used as primary residences
• Modular homes, which are 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 protects your home’s structure, attached fixtures (like decks or porches), and personal belongings from common risks such as fire, theft and wind damage. Like HO-3, the dwelling is covered at replacement cost value (RCV), while personal property is insured at actual cash value (ACV) unless upgraded.

HO-8 insurance is designed for older or historic homes whose replacement cost often exceeds their current market value. Because rebuilding these properties with original materials can be costly, HO-8 policies pay claims based on actual cash value (ACV) instead of replacement cost value.

Coverage under an HO-8 is named peril, usually protecting against the same 10 hazards listed under an HO-1 policy, such as fire, theft, vandalism and windstorm. It also includes standard coverage for liability, loss of use and medical payments.

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

While HO-8 coverage is more limited than newer policy forms, it provides a practical safety net for properties that may not qualify for modern replacement-cost insurance. It’s particularly valuable for homeowners who prioritize preserving unique or historic structures without the high cost of full reconstruction coverage.

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.

This fundamental difference helps you choose appropriate coverage for your situation.

• 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

The difference: 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 provides broader protection with fewer coverage gaps.

How your policy calculates payments has a major impact on your claim settlements.

• Replacement Cost Value (RCV) pays the cost to replace damaged items with new, similar quality items. That same refrigerator would be replaced with a new $1,200 model.
• Actual Cash Value (ACV) pays your property's current value minus depreciation. A five-year-old $1,200 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.

Each type of homeowners insurance, from HO-1 to HO-8, is designed for a specific kind of property and level of protection. HO-3 policies make up nearly 79% of the market because they offer broad coverage at a reasonable average cost, while HO-5 policies appeal to homeowners who want the most complete protection available. 

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.

Choosing the right policy depends on how your home is built, where it’s located and how much coverage you need. Knowing the differences between each HO form helps you match your insurance to your property and avoid paying for protection you don’t need.

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.