What Is an HO3 Policy?

An HO3 policy is the one of the most common types of home insurance. The coverage is written on an open-perils basis for your home and other structures, which means it can cover any risks except for those specifically excluded in the policy. However, it offers named-perils coverage for your personal property, meaning it only covers damage to belongings caused by the events listed in your policy.

These policies are usually intended for the single-family homes, multi-family homes, and townhouses. The property owner must live in the home and not rent any part of it.

What Homeowners Need to Know about HO3 Policies

The first thing to know is home insurance is written on a variety of forms. These forms standardize coverage from insurance company to insurance company. Which form your agent uses for your home depends largely on how much coverage you need. HO3 is typically used for owner-occupied homes because it offers sufficient coverage for common risks.

HO3 policies typically pay for damage to:

  • The home
  • Other structures on your property, like fences or detached garages
  • Personal belongings, like clothes, furniture, etc.

It can also pay for additional living costs, such as rent for a place to stay while your home undergoes repairs after a covered loss. 

For your home and other structures, HO3 is an open-perils policy. That means your insurance company can pay for damage to your home unless it’s caused by an event listed in the policy as an exclusion. Some common HO3 policy exclusions are:

  • Earth movement, such as an earthquake, sinkhole, and mudflow
  • Water damage from flood, sewer backup, or water seeping in through the foundation
  • Demolition of your home required by law to bring it to code
  • Seizure or demolition by a government agency or public authority

But coverage for the contents of your house is different. HO3 policies insure your personal property on a named-perils basis, meaning your insurer only pays for damage caused by events listed in the policy. Those named perils are usually the same 16 listed on an HO2 policy

You can get open-perils coverage for your personal belongings by adding an endorsement to your policy. You could also schedule your valuable items. Scheduled property is an insurance term that means your items are individually listed in the policy along with the amount of coverage each gets. When property is scheduled, an HO3 policy insures it on an open-perils basis.

HO3 policies also offer replacement cost coverage for your home, other structures, and personal belongings. That means depreciation isn’t deducted from your payout.

HO3 policies also cover your personal liability. This means it can pay for the damaged property and injuries you or a family member cause another person. Plus, it covers your legal bills if the injured person sues.

How to Get an HO3 Insurance Policy

You’ve come to the right place! Kin Insurance offers HO-3 policies. Just submit your address in the form below, and we'll help you find quality coverage for your home.

If you own a condo or rent our your property, we can help with that, too. Check out our condo insurance and landlord insurance.


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