Homeowners insurance is broken into eight main types, from the most bare-bones HO-1 policy to comprehensive HO-5 policies and variations designed for specific types of home. But how do you know which type of policy you need to buy?

Your mortgage lender may set requirements for the home insurance policy you buy, but you can also make the decision based on your type of home, the risk in your area, and the level of coverage you need.

HO-1 insurance

This is the most basic form of homeowners insurance—but it’s all but obsolete these days. This limited coverage policy only covers the actual cash value of your property from 10 perils: fire/lighting, wind/hail, riots, aircraft, vehicles, smoke, vandalism, theft, volcanic eruptions, and explosions. An HO-1 policy won’t cover your personal property, and there’s no ALE or liability coverage.

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HO-2 insurance

You’ll get more extensive coverage with an HO-2 policy, also known as a “broad form” policy. Unlike an HO-1 policy, an HO-2 covers both the main structure of your home and your personal belongings, along with ALE and liability coverage in some cases. It also adds six more named perils for coverage:

Accidental water discharge from a sprinkler system, plumbing, air conditioning, or appliances

Sudden and accidental tearing apart or cracking of sprinkler systems, hot water heating systems, or air conditioning

Freezing of an appliance, plumbing, air conditioning, sprinkler, or heating system

Sudden and accidental damage from electrical currents

Damage caused by the weight of snow or ice

Falling objects

HO-3 insurance

The HO-3 Special Form policy is the most common type of homeowners insurance. Unlike an HO-2 policy, which covers named perils only, an HO-3 is an “open perils” policy for your main dwelling and other structures—meaning that damage will be covered unless it’s caused by a peril specifically excluded from the policy.

Typical exclusions include:

Floods

Earthquakes

Sinkholes

Landslides

Government action

Normal wear and tear

Mold

Animals or pests

Personal property, on the other hand, is covered only for named perils under an HO-3 policy—typically the same

16 perils

covered by an HO-2 policy.

HO-4 insurance

Also known as renters insurance, this is the type of home insurance policy needed by renters. It includes personal property and liability coverage and generally covers the same named perils as an HO-2 or HO-3 policy.

HO-5 insurance

This is the Cadillac of homeowners insurance; the most comprehensive type of policy money can buy. An HO-5 policy is an open perils policy with higher coverage limits, ideal for homeowners with a lot of high-value property. However, the robust protection you’re paying for means a hefty premium—so consider carefully whether it’s the right option for you.

HO-6 insurance

Also known as condo insurance, an HO-6 policy is similar to renters insurance, as it covers the personal property in your unit and includes liability coverage. But unlike renters insurance, an HO-6 policy may include some coverage of your unit’s structure, such as interior walls. The exact terms of an HO-6 policy will depend on what’s covered by the condo association’s master policy.

HO-7 insurance

If you own a mobile or manufactured home, like a trailer or RV, you’ll need an HO-7 policy, which covers the exterior of the home under an open perils policy. Personal property, on the other hand, is covered only for named perils. HO-7 insurance also includes liability, additional living expenses, and medical payments coverage.

HO-8 insurance

Some homes need a special type of insurance based on their age or historical significance. For landmark homes or any house constructed with materials not easy to access today, there’s HO-8 insurance. Both the structure and your personal property are covered under a named perils policy.

Let’s take a closer look at what is and isn’t covered under the eight types of home insurance. The table below breaks down the coverage options for each type.

Policy type	Coverage included	Open perils?	Perils covered
HO-1	Main dwelling	No	Only 10 perils covered
HO-2	Main dwelling and personal property (sometimes ALE and liability)	No	16 named perils
HO-3	Main dwelling, other structures, personal property, ALE, liability	Yes, for main dwelling only	16 named perils covered for personal property
HO-4	Personal property, ALE, liability	No	16 named perils
HO-5	Main dwelling, other structures, personal property, ALE, liability, medical payments	Yes	Any except excluded perils
HO-6	Personal property, ALE, liability	No	16 named perils
HO-7	Main dwelling, personal property, ALE, liability, medical payments	Yes, for exterior only	16 named perils
HO-8	Main dwelling, personal property, ALE, liability, medical payments	No	16 named perils

How to choose the right homeowners insurance policy

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