8 Types of Homeowners Insurance

Home insurance policies come in eight forms, each covering 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), so claim payments factor in 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 is rarely offered today, as most insurers have phased it out in favor of broader options.

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 also cover personal property, loss of use, liability and medical payments.

Under an HO-3 policy, the dwelling and other structures are covered at replacement cost value (RCV), meaning the full cost to rebuild or repair with new materials, no depreciation deducted. Personal property defaults to actual cash value (ACV), but most insurers offer an RCV upgrade for an added premium.

What HO-3 Insurance Doesn't Cover

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

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 let you upgrade to replacement cost value (RCV) for more comprehensive claims payouts.

Since renters don't need dwelling coverage, HO-4 is far more affordable, averaging $12 a month compared to $296 for a typical HO-3 policy.

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 suits homeowners with newer or higher-value homes, or anyone who wants the most comprehensive coverage available. Like HO-3, HO-5 covers liability, loss of use and medical payments — but with higher limits.

Because of its broad coverage and higher claim limits, HO-5 insurance is more expensive than HO-3 policies, but it pays out more when you file a claim. 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 everything inside the unit: the portions you're responsible for, not the building itself. Unlike HO-3 insurance, the condo association's master policy covers the building's structure and shared areas, while HO-6 covers the unit's interior, 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 is a practical option for homeowners looking 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.

With named peril, you must prove the damage came from a covered event. With open peril, coverage is assumed unless the insurer can prove an exclusion applies, which means broader protection but a higher premium.

• 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 means fewer out-of-pocket costs at claim time; actual cash value leaves you covering the gap between what the item is worth now and what it costs to replace."

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 cover renters, condo owners and mobile homeowners, while HO-8 suits owners of older or historic properties.