HO5 Homeowners Insurance Policy

It’s unfortunate when disaster strikes your home. This is exactly why homeowners need financial protection from homeowners insurance policies. Selecting the right amount of insurance is key to protecting any given home’s structure and valuable items. However, homeowners need to know that not all home insurance policies offer equal protection. HO5 policies have the best protection. An HO5 homeowners insurance policyprotects your home from the top of its roof to the bottom of the foundation.

What is an HO5 Policy Form?

In the insurance industry, HO5 policies are otherwise known as complete forms because they offer complete protection for a home. Specific insurance policies cover certain types of disasters. For instance, an HO3 policy, the most common homeowners insurance form, offers named-perils protection for the home’s contents. This includes clothing and furniture. HO3 policies cover 16 named perils such as explosions, fire and theft.

An HO5 homeowners insurance policy also offers another form of coverage for the home. A majority of HO5 policies, unlike HO3 policies, have equal protection for home and personal property. Some exclusions apply, but homeowners should know that HO5 is the highest form of protection.

When Are HO5 Policies Typically Used?

Because HO5 policies typically cost more than other home insurance policies, it makes sense for the industry to have created this home insurance to meet the needs of homeowners who want to maximize their protection. HO5 policies cover high-value homes with a market value of more than $750,000. Other insurers offer a higher coverage limit that includes HO5 policies, too.

What Do HO5 Policies Cover?

Generally speaking, an HO5 homeowners insurance policy protects the structure of the home, any other structures on the property and all personal belongings against every peril listed in the policy. If, by chance, it were to rain and the water leaked through your roof and onto furniture causing damage, you would be able to file a claim without having to prove that the loss is covered. On the other hand, if you were to file an HO3 claim for the same loss, it would be on you to prove one of the named perils on the list as a covered loss. If you are not able to do that, you are likely not to be protected.

What Perils Are Covered Under an HO5 Policy?

The most common perils that fall under an HO5 policy are:

•  Fire and lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Aircraft
• Vehicles
• Smoke
• Vandalism
• Theft
• Falling objects
• Weight of ice, snow or sleet
• Accidental discharge or overflow of water
• Freezing
• Volcanic eruption

While an HO5 homeowners insurance policy provides more coverage than any standard homeowners’ insurance, some exclusions still apply. An HO5 homeowners insurance policy will not cover:

• Ordinance or law
• Earth movement
• Water damage from flooding, sewer backups or water that seeps up from the ground
• Power failure
• Neglect
• War
• Nuclear hazard
• Intentional loss
• Government action
• Birds, vermin, insects and rodents
• Animals owned by the insured

The list goes on and is not limited to what is mentioned above, so it is essential to fully understand the ins and outs of an HO5 homeowners insurance policy.

Replacement Cost Coverage and HO5 Policies

There are plenty of differences that distinguish HO5 and HO3 policies from one another. An HO5 policy is more expensive than basic HO3 coverage, but the extra cost might be worth in the event of a claim.

Reference the table below to determine the differences between the two and how replacement cost coverage works.

How to Compare and Get an HO5 Insurance Policy

For everyone planning on purchasing an HO5 insurance policy, it is helpful to become familiar with insurance terms and conditions. Requesting quotes and more information when speaking with an agent will only help you find the best-priced policy that works for you. Gather as much information as possible so you have everything you need to know to make a wise decision. You will find that HO3 and HO5 policies cover additional living expenses and liability if that is something you are interested in purchasing.

The purpose of additional living expenses coverage is to help homeowners who cannot temporarily live in their homes. It is used after a fire or other disaster that would require you to live somewhere else.

You will also find that both HO3 and HO5 policies have personal liability coverage. As the policyholder, you can decide on the level of liability protection you want if someone were to sustain injuries on your property. The significant part about liability is that it also covers legal costs and court damages.

Compare Home Insurance

The big difference between HO3 and HO5 policies is open-peril versus named-peril coverage.

A peril policy is part of homeowners’ coverage that determines what the policy protects against. Open perils mean you are protected against certain disasters like fire and lightning. Named perils are only the items listed on the policy covered.

An open-perils policy offers more protection.

Only named perils for personal property and open perils for structures are covered under HO3 policies.Open perils for both personal property and structures are covered under HO5 policies. Try to remember that unless it is stated as excluded in your policy, you are covered.

Read more >> The Best Home Insurance Companies

Deciding Which Homeowners Insurance Policy Is Right for You

First, you should request insurance company quotes for both HO3 and HO5 policies or whatever policy interests you. That way, you can weigh the price difference should you want to add personal property endorsements to a less expensive policy. If you have more belongings and property, you should consider an HO5 policy because it will insure your contents and personal property at higher values.

Frequently Asked Questions