HO1 policy, also called the basic form, is bare bones homeowners insurance. It lists the specific perils, or events, your insurance provider covers. If a peril is not explicitly listed in the policy, it is not covered by HO1.
First, it helps to know that insurance agents issue policies on policy forms. Each form addresses a different situation and set of risks. HO1 provides coverage for an owner-occupied, standalone home and its contents. It is a named-peril policy, which means it only covers the 10 perils listed in the policy:
That list may seem comprehensive, but some important risks are missing. For instance, HO1 policies do not cover:
These events are more common than you may think, plus they can cause significant and costly damage.
Additionally, some HO-1 policies do not cover your personal property even if it’s damaged by a named peril. In that case, homeowners may want to buy a separate policy for the contents of their home.
These limitations make HO-1 policies unpopular. Homeowners can usually afford more comprehensive coverage on other forms, and that’s the kind of insurance mortgage lenders typically want you to have.
You may need to look into supplemental insurance if you have an HO-1 policy. This can come in the form of endorsements to your current coverage or standalone policies for:
However, your better option may be to find an open-perils policy. Plenty of insurers offer affordable open-perils coverage on the HO3 form, including Kin. Even better? HO3 policies generally include personal property and personal liability coverage. And you don’t have to wait for your policy term to end before you shop around. You can switch home insurance carriers at any time.
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