What Is an HO-5 Homeowners Insurance Policy?

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    As a homeowner, you want to protect your home from harm. This could damage caused by a storm, fire, or other covered event that can damage your property. Fortunately, homeowner’s insurance can offset some of the cost for covered perils when this happens.
    But what about perils that are not covered? For this you’ll need an HO-5 form. So, what exactly is an HO-5 form and how can one help protect your home? Here's everything you need to know.

    What Is HO-5 Insurance?

    An HO-5 insurance policy is designed to protect your home like other insurance policies. The difference is in the type of coverage you receive with an HO-5 policy. In many cases, an HO-5 policy includes perils that are not covered by other policy types.
    When purchasing a homeowner’s insurance policy, ask your agent some basic questions first.
    Is the policy open-peril or all-risk? Insurance companies tend to market their various policies under different names, so it’s best to ask to make sure that the policy you’re getting is the same as an open-peril or all-risk, which is the hallmarks of an HO-5 policy.
    Do you need any additional exemptions? Even with an HO-5 policy in place, you might still need some exemptions on your policy for high-ticket items or uncovered items.
    How much does the policy pay when replacing items? Another good question to ask your agent is what type of payment you should expect when replacing a damaged item. With an HO-5 policy, this amount should be the full amount that you originally paid for the item and not a depreciated amount.

    How Does HO-5 Insurance Compare to Other Insurance Types?

    An HO-5 plan provides insurance coverage on perils on an open basis, whereas other insurance types, such as an HO-3, do not. Furthermore, an HO-5 insurance plan pays to replace personal property as if you’re buying a new item, whereas an HO-3 only pays the actual cash value of the item in a used state.
    A named peril is any peril named on your homeowner’s insurance policy as a covered incident. In addition to named perils, your homeowner’s policy will also have a list of exclusions that it won’t pay for as a standard part of your coverage. For these items you’ll need additional insurance.
    HO-5 coverage extends the named perils to include other perils outside of the exclusions listed on your policy. Because of this, HO-5 coverage is referred to as open peril, especially when it comes to personal property protection.

    Common Named and Excluded Perils

    Your home and the items in it receive various protections according to the type of homeowner’s insurance policy that you purchase. For the most part, an HO-1 or HO-2 insurance plan, which are the most basic plans you can get, includes the following basic covered perils.
    • Fire
    • Lighting
    • Windstorm
    • Hail
    • Explosion
    • Theft
    • Riot
    • Aircraft
    • Falling objects
    • Vehicles not owned or operated by the policy holder
    • Water from an appliance, sprinkler, or plumbing
    • Smoke
    • Vandalism
    • Freezing of pipes and plumbing
    • Volcanic eruption
    • Electric current
    • Weight of ice, snow, and sleet
    In addition to covering some basic perils, your homeowner’s insurance policy also has a list of incidents that it won’t cover. Some of the common excluded perils include:
    • Flood
    • Pollutants
    • Mold
    • War
    • Earthquakes
    • Wear and tear
    • Overflow of sump pump
    • Destruction or confiscation by government
    • Cracking of the pavement, walls, roofs, and ceilings
    • Vandalism (when the property has been vacant for over 60 days)
    • Weight of ice, snow, and sleet on an outbuilding
    • Losses through the actions of vermin, such as insects and other animals, including birds or an insured animal
    • An interruption of power taking place off of your property
    • A collapse caused by something other than a basic, covered peril
    • Intentional losses
    • Freezing while the home is vacant
    • Nuclear hazard
    In many cases, your insurance company provides additional coverage options for the exclusions listed above, including HO-3 and HO-5 policies. It is important to ask your insurance agent what is and isn’t covered under your homeowner’s policy and to purchase additional coverage as needed, including an HO-5 policy.

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