What Is HO-1 Insurance and What Does It Cover?

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    HO-1 insurance, also known as basic form, is a type of homeowner’s coverage with minimal protections. While it is the cheapest form of homeowner’s insurance you can find, it’s important to understand what it does and does not cover. That way, you can make an informed decision about how to protect your home against potential disasters.

    The 10 protected perils of HO-1 insurance

    Basic form home insurance provides coverage in 10 situations. For some homeowners, this is sufficient peace of mind, and it comes at a bargain cost. The 10 protected perils are:
    • Fire or lightening
    • Windstorms or hail
    • Smoke
    • Volcanic eruptions
    • Explosions
    • Damage from aircraft
    • Damage from vehicles
    • Vandalism
    • Theft
    • Rioting
    All of these situations are ones that would be sudden and unpreventable. So, an HO-1 insurance policy can cover the costs of damages if your house burns down, an airplane crashes into your roof, or a disgruntled ex decided to graffiti your walls. It also covers quite a few other situations.

    Situations in which an HO-1 insurance policy doesn’t help

    While basic form homeowner’s insurance provides protection against quite a few disasters, it does not cover everything. Here are some situations where your HO-1 insurance policy would not be helpful:
    • Fallen objects
    • Weight from ice or snow
    • Discharge or overflow of water or steam
    • Busting of hot water heater, air conditioning system, or automatic sprinkler system
    • Pipe freezes
    • Damages from artificially generated electricity
    • Earthquake damage
    • Flood damage
    • Damage in wartime or nuclear disaster
    • Landslides, mudslides, or sinkholes
    • Sewer backups and other issues
    • Mold or mildew
    • Termites and other pests
    To have these protections requires either a broader homeowner’s policy than HO-1 insurance or the addition of specialty riders, or add-ons. HO-1 insurance also does not provide protections for the loss of personal property, liability issues, or additional living expenses that may arise if you need to leave your home while repairs are made.
    A basic HO-1 policy only protects a limited array of situations for the main dwelling. Other structures and features are also left in the cold with an HO-1 insurance policy.

    Other considerations for HO-1 insurance

    Since the protections offered through an HO-1 insurance policy are so narrow, many mortgage lenders will not accept such a policy. There is simply too much risk that uncovered disasters could strike, and there would be a total loss of the home. If that were to happen, your lender could be left holding a bag of debt, so to speak.
    In fact, HO-1 insurance policies are no longer common. Many insurance providers do not even offer this limited coverage as an option. The main reason HO-1 basic policy insurance is still around at all is for older homes that are very difficult to insure. In this case, HO-1 insurance may be the only type of policy that a provider would offer.
    There are three other kinds of homeowner’s insurance policies that provide broader protections: HO-2, HO-3, and HO-5.
    An HO-2 insurance policy, also known as broad form, covers a few other perils yet is still a relatively cheap option. The HO-3 insurance policy, known as special form, is a bit more comprehensive yet does not cover earthquakes or floods. This broad form is the most commonly chosen version of homeowner’s insurance.
    The HO-5 insurance policy, also known as comprehensive form, is basically the Cadillac of homeowner’s insurance. It is the most expensive, but it covers virtually everything that you can insure in regard to your home.

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