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HO-5 insurance

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Homeowners insurance is not one-size-fits-all. There are different types of home insurance policies, called “forms,” that come with different levels of protection. HO-5 insurance is the most robust property policy form that you can purchase. An HO-5 policy provides home insurance coverage and personal property insurance for more perils than other policy forms. It could be an ideal choice for anyone looking for an encompassing policy to protect their home and belongings.

What is an HO-5 insurance policy?

An HO-5 policy is a homeowners insurance policy type that covers your home and personal belongings under open perils coverage, except for certain exclusions. This differs slightly from a standard HO-3 homeowners policy, which covers your home as open perils but your personal possessions only for named perils.

An open peril policy, like an HO-5 insurance policy, will list out exclusions. That means your policy covers any scenario that is not specifically excluded. This means that HO-5 policies will cover you for more types of damage than other types of home insurance.

What does an HO-5 policy cover?

Home insurance policies can often be customized to fit your needs, so your exact coverage will depend on your specific policy. However, there are several components of a standard HO-5 policy, including:

  • Dwelling coverage: The structure of your home is covered on an open perils basis. This means that you are covered for any loss that is not specifically listed as an exclusion.
  • Personal property: Your belongings are also covered on an open peril basis, so anything not excluded is covered.
  • Liability: Another standard feature of an HO-5 policy is liability coverage. This protects you in case someone is injured while at your home or you are found liable for damaging someone’s property. It can also cover legal fees and settlement costs if someone tries to sue you.
  • Medical Payments: Another type of medical coverage to help cover medical expenses if a guest is injured on your property, but you are not legally liable for their injuries.

HO-5 also covers loss of use, meaning you’ll be reimbursed for additional living expenses, like hotel and meal costs, if your home is damaged from a covered claim and you can’t live there during repairs. This provision is included in most standard homeowners insurance policies. You might also have the option to tailor your policy to your needs by adding endorsements like water backup, identity theft or scheduled personal property.

HO-5 policy exclusions

Checking your policy for a comprehensive list of HO-5 exclusions is a good idea; every company is different and exclusions could vary. However, the following exclusions are fairly standard across HO-5 policies:

  • Earth movement
  • Power failure
  • Nuclear hazard
  • Collapse
  • Settling or expanding
  • Mold, fungus or rot
  • Smog or corrosion
  • Ordinance or law
  • Neglect
  • Intentional loss
  • Theft from a building under construction
  • Birds or vermin
  • Typical wear and tear
  • Smoke from agricultural or industrial site
  • Water damage from sewer backups, floods or seepage
  • War
  • Government action
  • Vandalism of vacant properties
  • Mechanical breakdown
  • Pollutant discharge
  • Owned animals

That might seem like a long list of exclusions. But remember that damage caused to your home or personal belongings is covered unless specifically excluded by your property insurer.

Who needs HO-5 coverage?

You don’t have to own a high-value home to want HO-5 coverage. Because HO-5 policies offer open perils coverage on both the dwelling and your personal property, your finances will be better protected against a wider range of scenarios. Homeowners can opt for this robust insurance as a financial safety net against potential damages. With an HO-5 policy, your house and your possessions get an extra level of financial protection thanks to open perils coverage.

What is the difference between HO-3 and HO-5 policies?

HO-3 policies are the most common type of homeowners insurance. Both HO-3 and HO-5 policies cover your dwelling — the structure of your home — on an open perils basis.

The difference is in how each policy form covers your personal property. With an HO-5 policy, you get open perils coverage for your belongings, but with an HO-3, your items are covered on a named perils basis. This means that your personal property is only covered for the perils specifically listed in the policy, and anything else is considered excluded.

Frequently asked questions

Is HO-3 or HO-5 better?

Both policy types have benefits and drawbacks. An HO-5 policy might be more expensive than an HO-3 policy for the same house, but it will give you broader coverage. If you aren’t sure what type of home insurance to purchase, working with a licensed agent might help you decide.

How much does an HO-5 policy cost?

Because they cover a wider array of scenarios, HO-5 policies are likely to cost more than HO-3 policies. The average cost for an HO-3 policy in the U.S. is $1,312 per year for $250,000 in dwelling coverage. For the same coverage, an HO-5 policy is probably going to be a bit more since it covers more potential claim scenarios.

Where can I buy HO-5 insurance?

Many home insurance companies sell both HO-3 and HO-5 policies. If you specifically want an HO-5 policy, be sure to let an agent know when requesting home insurance quotes. Online quote forms may have an option to select the policy type you want, and if they don’t, you might want to call the carrier for clarification.

Learn more: Affordable home insurance companies

What is all-risk insurance?

“All-risk” is another, potentially misleading, name for open perils. Despite its name, all-risk does not mean that everything is covered. All-risk policies, also known as open perils policies, still include coverage exclusions. Everything not specifically excluded is covered.

Written by
Cate Deventer
Insurance Writer & Editor
Cate Deventer is a writer, editor and insurance professional with over a decade of experience in the insurance industry as a licensed insurance agent.
Edited by
Managing Editor