HO1 Homeowners Insurance

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Contributor, Benzinga
December 28, 2021

An HO1 homeowners insurance policy is a type of basic property insurance coverage that you can use to protect your home from perils like fire, theft, vandalism and additional hazards. If you own the home that you live in and you’re looking for affordable insurance protections, you may want to consider an HO1 homeowners insurance policy. 

Read on to learn more about HO1 insurance and what types of perils it protects against. Begin comparing policies with Benzinga’s guide. 


Key Points

  • HO1 insurance is the most basic type of homeowners insurance policy
  • Unlike other, more comprehensive types of insurance coverage, HO1 insurance policies only provide coverage for the dwelling of your home
  • HO1 insurance policies do not include liability or personal property insurance, which are both required insurance protections to sign on most mortgage loans
  • An HO1 policy on its own will likely not be enough coverage for your home

What is an HO1 Policy Form?

An HO1 insurance policy form is a type of homeowner’s insurance. Sometimes referred to as a bare bones policy or a named peril policy, HO1 policies are less inclusive than other types of homeowners insurance policies. These policies do not include common coverages found on HO3 policies, which are the most commonly used insurance homeowners insurance policies.

While HO1 policies might be more affordable than alternatives with more expansive coverages, your mortgage insurance provider may require you to have additional supplemental coverage beyond your HO1 policy if you’re in the process of financing your home. This can add to the total price that you’ll pay for coverage, which means that you may want to explore both HO1 and HO3 options, particularly if you’re shopping on a budget. 

When are HO1 Policies Typically Used?

HO1 homeowners insurance policies are not popular options for home coverage, and it will not be enough coverage for most homeowners. Most homeowners who select HO1 coverage are forced to because either themselves or their home carry some form of risk that the insurance company will be taking on when they issue you a policy. For example, if you have a long history of filing homeowners insurance claims due to negligence, an insurance provider may deem you too risky for an HO3 policy and limit your available coverage to HO1 level protection.

An HO1 policy will also not satisfy the insurance requirements set in place by mortgage companies. Most mortgage providers will require you to carry protection for your personal property as well as liability protections — 2 protections that are not included on HO1 policies. This means that unless you purchased your home in cash or have already paid off the entirety of your mortgage, you may not be able to carry HO1 insurance as a condition of your mortgage loan. 

What do HO1 Policies Cover?

HO1 homeowners insurance policies provide very limited coverage, and they only provide coverage for the physical structure of your home. When you sign onto an insurance policy, your policy will include a list of perils, which are situations that can cause damage that is covered by your insurance. 

With an HO1 policy, only the specific perils named in your policy are covered — unless a source of damage is explicitly mentioned in the terms of your policy, you should not assume that you have coverage.

HO1 insurance policies do not offer many of the common coverages found on other homeowners insurance policies, including the following protections.

  • Personal property insurance: Personal property insurance compensates you if things in your home are stolen or destroyed as the result of a covered peril. HO1 policies do not include any type of coverage for your personal property — which means that if everything in your home is destroyed following a fire, you will only receive compensation for the physical structure of your home from your HO1 insurance policy provider.
  • Liability coverage: Liability coverage protects you in the event that someone sues you for damaging their property or after they are injured on your property. HO1 insurance does not include any liability coverage, which is a required protection to close on most mortgage loans.
  • Loss of use coverage: Loss of use coverage helps you pay for expenses above and beyond those that you would normally incur in the event that your home is deemed inhabitable. For example, if a major fire breaks out in your home and your basic utilities cannot function, you may need to move into a hotel room until your home is repaired. While HO3 policies will help you to pay for these types of expenses, HO1 policies will not.

Your HO1 policy also won’t provide any type of coverage for perils that are not outlined in your policy. This makes it especially important to thoroughly read and understand the terms of your insurance before you sign up for coverage. 

What Perils are Covered Under an HO1 Policy?

When you purchase insurance, it’s important to know which perils are covered and which are not. Perils are specific hazards that are covered under your insurance policy — if your home is damaged by a peril that’s covered under your policy, you can file an insurance claim to help compensate you for the damage. 

However, if your home is damaged by a peril that is not named in your HO1 policy, you will not be able to file a claim with your insurance provider, and you’ll be left to cover the loss out-of-pocket.

Most HO1 homeowners insurance policies include coverage for the following perils:  

  • 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

If a peril is not specifically named on your HO1 insurance policy, you will not be covered for it. This means that any type of damage resulting from flooding, earthquakes or falling objects are not covered. You may be able to purchase a policy extension that provides you with additional coverage for instances not covered under your HO1 policy. 

How to Compare and Get an HO1 Insurance Policy

When shopping for homeowners insurance, there are a number of factors to consider, including the following.

  • Your eligibility: Most insurance providers no longer offer HO1 homeowners insurance to all applicants. If you only qualify for HO1 insurance, you may need to speak directly with a representative to get your coverage. Begin your search by looking for companies that continue to offer HO1 coverage.
  • Deductibles: Like most other types of insurance, HO1 insurance policies include a deductible. Your deductible is the total amount of money that you’ll need to pay towards an insurance claim before your insurance provider will begin to cover damages. Choose a policy with a deductible that you know you’ll be able to afford should you need to file a claim.
  • Policy maximums: All homeowners insurance policies include limits on the amount of money that your insurance provider will pay out towards home damages. Most insurance professionals recommend choosing a policy with a maximum that’s high enough to rebuild your home in the event that you cover a total loss.

Most homeowners will not qualify for an HO1 insurance policy. Unless you have a history of filing insurance claims with a previous homeowner’s insurance company, you may not be eligible for HO1 coverage. 

If you’re interested in HO1 insurance policies because they tend to be more affordable than HO3 homeowners insurance policies, consider getting multiple quotes from competing insurance providers before choosing a policy. Every insurance company has its own formula it uses to calculate insurance rates — which means that it’s possible to find the exact same coverage from 10 different companies at 10 completely different price points. 

Compare Home Insurance

Not sure where to begin your search for homeowner’s insurance? Consider beginning by getting quotes with the following recommended providers. 

Find Homeowners Insurance Today

In some cases, HO1 homeowners insurance will be the right choice. However, an HO1 homeowners insurance policy will not provide sufficient coverage on its own for most homeowners. 

Be sure to explore both HO1 and HO3 policies to ensure you have all of the protections to provide you with peace of mind as a homeowner.  

Frequently Asked Questions


What is the difference between HO1 and HO3?


HO1 insurance policies provide coverage for your dwelling only, and only for perils specifically named in your policy. HO3 policies are open peril policies that offer coverage for your dwelling and other structures on your property, along with personal property and liability insurance.


What is the difference between HO1 and HO2?


HO2 policies provide dwelling coverage for all of the perils on HO1 policies along with coverage for additional perils like falling objects, and weight of snow, sleet, or ice. 


Can you insure your house for more than it is worth?


Yes. Select insurance providers will allow you to insure your home for up to 125% of its value, which can help you cover rising costs that occur due to inflation.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.