What is an HO3 homeowners policy?

An HO3 policy is the most common type homeowners insurance policy because it's a good balance between coverage and affordability. It protects your home an on open perils basis, meaning it's covered for all sources of damage except those the policy lists as exclusions. Your belongings are covered on a named perils basis, meaning they're covered for events the policy lists.

What does HO3 stand for?

HO3 is shorthand for homeowners policy special form 3. There are eight of these forms for homeowners insurance, and all have slight variations. An HO3 policy is the most common type of homeowners insurance.

What does an HO3 policy cover?

HO3, or a homeowners insurance policy, covers your home, your personal belongings, other structures on your property (like a detached garage, shed, or fences), loss of use, personal liability, and medical payments for small guest injuries.

What are the named perils on an HO3 policy?

Personal belongings are covered on a named-perils basis in an HO3 policy. That means belongings are covered for these 16 events list in the policy: fire or lightning; hail or windstorms; explosions; riots or civil commotion; damage from aircrafts; damage from vehicles; smoke; malicious mischief or vandalism; theft; volcanic eruptions; falling objects; weight of ice, snow, or sleet; accidental discharge of water or steam; sudden and accidental tearing apart, cracking, burning, or bulging of certain household systems; freezing of household systems, sudden and accidental damage from artificially generated electrical current.

HO3 policy

A special form home insurance policy that covers your home and other structures on an open-perils basis and your personal property on a named-perils basis

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 reliable, affordable coverage for common risks.

HO3 policies typically pay for:

Damage to the home (Coverage A).
Damage to other structures on your property, like fences or detached garages (Coverage B).
Damage to or theft of personal belongings, like clothes, furniture, etc (Coverage C).
Additional living expenses when a covered claim keep you from living at home (Coverage D).
Legal expenses when you or a household member is sued over someone’s injuries or property damage (Coverage E or personal liability).
Medical payments when guests are injured at your home (Coverage F).

What perils are covered in an HO3 policy?

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:

Fire or lightning
Hail or windstorms
Explosions
Riots or civil commotion
Damage from aircrafts
Damage from vehicles
Smoke
Malicious mischief or vandalism
Theft
Volcanic eruptions
Falling objects
Weight of ice, snow, or sleet
Accidental discharge of water or steam
Sudden and accidental tearing apart, cracking, burning, or bulging of certain household systems
Freezing of household systems
Sudden and accidental damage from artificially generated electrical current

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 and the magic of replacement cost coverage

One of the big benefits of an HO3 policy is that it offers replacement cost coverage for your home and other structures. Some HO3 policies default to insuring personal belongings for their replacement cost; others require you to add that on.

Instead of only paying out the depreciated value of your home or other structures like an actual cash value policy, replacement cost coverage pays what it really costs to replace or rebuild with similar, new items today.

Put another way: you’ll actually have the funds you need to buy new replacements and rebuild your home after a loss.

How to get an HO3 insurance policy

You’ve come to the right place! Kin Insurance offers HO3 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.