What is an HO-3 insurance policy? (August 2025)

An HO-3 insurance policy is a kind of home insurance that defends policyholders against financial losses brought on by unexpected disasters that strike your home. An HO-3 policy is the most typical type of home insurance coverage in the US. Nearly all private property insurance companies provide it. In the case of a covered loss, this policy form will cover your home, personal property, and liability.

HO-3 insurance, often known as a special form or open perils policy, protects your home from all types of damage, apart from those specifically excluded by the policy. Also, it protects your personal items from theft or damage and your liability costs if you are held liable for an incident.

Why do I need HO-3 insurance?

You will need an HO-3 insurance policy because it offers financial protection if the structure of your home gets damaged by calamities or other risks like fire or theft. In addition, as a homeowner, you may experience numerous unexpected injuries; for this reason, liability insurance is a part of your policy.

Also, an HO-3 insurance policy protects your personal property by serving as a shield against costly replacements or repairs. Due to the various layers of safety, it is typically necessary when applying for a mortgage loan because it helps to protect both your and your lender's financial investment.

What perils are covered in an HO-3 policy?

Your home and other structures get coverage under open perils under an HO-3 policy. At the same time, your personal property gets protected against named perils.

Named perils

These comprise the 16 risks mentioned in your policy and for which you have coverage. The following are the 16 named perils in the policy.

• Lightning or fire
• Hail and windstorm
• Smoke
• Explosion
• Theft
• Falling objects
• Riot or civil commotion
• Damage caused by aircraft
• Damage caused by vehicles
• Power surges
• Volcanic eruption
• Weight of ice, sleet, or snow
• Vandalism and malicious mischief
• Freezing
• Unintentional discharge/overflow of water
• Unexpected tearing/cracking of appliances

Open perils

All causes of loss, excluding those specifically stated in your policy's exclusions, get covered by open perils coverage. Therefore, the burden of proving that your policy does not cover a loss or damage rests with the insurer when you file a claim for damage to your home's structure. The following are excluded from the coverage.

• Flooding
• Earthquakes
• Negligence
• Intentional loss
• Government action
• War
• Nuclear hazard
• Ordinance or law
• Power surges that initiate off your property

HO-3 coverage features

Your home and personal property are not the only things an HO-3 insurance policy protects. These are the features of an HO-3 insurance policy.

Dwelling coverage: The coverage for your home and any related structures comes under your dwelling coverage. The calamities that an HO-3 policy won't cover for your home can be found on this list.

Other structures coverage: The average coverage for any additional structures, like a detached garage or fencing, is 10% of your dwelling coverage limit.

Personal property: Your furniture, TV, clothes, and other possessions gets covered under personal property. You should consider getting an HO-5 policy if you want open peril coverage for your personal items. It's crucial to take sub-limits into account when configuring personal property insurance. For instance, the insurer may limit the homeowner's coverage for expensive items like jewels or fine art. The following are some typical sub-limits.

Medical payments to others: It will help cover medical costs up to your policy limit if a visitor to your house gets hurt while on your property. In addition, it will cover the following costs.

• Medical bills and expenses
• Dental procedures
• X-ray costs
• Surgical costs
• Funeral service expenses
• Ambulance and hospital costs
• Nursing care
• Prosthetic devices

What does an HO-3 policy not cover?

While you get coverage for many perils, you are still required to provide evidence that one of the covered claims was the cause of the harm. So it could slow down the claims procedure depending on the kind of claim and the particulars. There are a few further exceptions that we should note. For instance, many insurances won't cover the most frequent risks of floods and earthquakes.

Homeowners who want coverage for these risks will typically need separate earthquake or flood insurance. These are some typical instances that the HO-3 insurance policy doesn't cover.

• Flooding
• Earthquakes
• Negligence
• Intentional loss
• Government action
• War
• Nuclear hazard
• Ordinance or law
• Power surges that initiate off your property
• Mold

HO-3 vs. HO-1 or HO-A policies

A named perils policy for your home and personal property is an HO-1, often known as the basic form. The HO-1 form of homeowners insurance has the fewest coverage options compared to the HO-2 or HO-3 forms.

Perils typically named in an HO-1 insurance policy

• Fire
• Lightning
• Explosion
• Smoke
• Civil unrest or riot
• Windstorm
• Theft
• Hail
• Vehicles
• Vandalism or malicious mischief

Compared to the HO-3 policy, damage from falling items, the weight of ice, snow, or sleet, and non-flood water damage are the most significant risks that the HO-1 policy doesn't cover. HO-1 insurance is no longer available in most states due to its limited coverage.

HO-3 vs. HO-2 policies

The broad form, or HO-2 policy, gives homeowners more protection than an HO-1 but less than what an HO-3 insurance offers. Similar to the HO-1 basic form, an HO-2 is a named perils policy, indicating that only damages specifically listed in the policy get coverage. However, a typical HO-2 policy enhances the number of risks specified to provide a wider range of coverage than an HO-1 policy.

Perils typically named in an HO-2 insurance policy

• Fire
• Windstorm
• Lightning
• Smoke
• Theft
• Hail
• Explosion
• Vehicles
• Civil unrest or riot
• Vandalism or malicious mischief
• Trees and other falling objects
• Weight of ice, snow, and sleet
• Water damage resulting from freezing, rupturing, or sudden and accidental overflow of plumbing, heating, air conditioning, fire sprinkler system, or household appliance

HO-3 vs. HO-B policies

Homeowners can buy an HO-B policy while looking for insurance, especially in Texas. Given that it covers your home against open perils and your personal property against named perils, an HO-B policy is similar to an HO-3 form. However, HO-B policies are for those whose homes are near the ocean as they typically offer broader coverage against risks related to water damage.

HO-3 vs. HO-4, HO-5, and HO-6 policies

Other policy types offer insurance custom-made to particular categories of homeowners or residents. The most inclusive kind of home insurance is an HO-5 policy, which provides more comprehensive coverage than an HO-3 policy. One of the significant differences between an HO-5 policy and an HO-3 insurance policy is that an HO-5 policy extends open hazards coverage to personal property.

Tenants get coverage under HO-4 plans, generally known as renters insurance policies. When you rent an apartment, the risks that harm the building's structure are your landlord's responsibility. HO-6 policies are for condo owners. They may not necessarily be responsible for the expense of unexpected damages to the common parts of their building or their built-in property. It can be fixtures or appliances within the condo. When comparing HO-3 and HO-6 plans, an HO-6 covers liability, personal property, and loss of use but excludes the housing coverage that an HO-3 offer.

How is an HO-3 policy different from other types of homeowners insurance?

An HO-3 insurance policy provides financial security against various disasters and covers many disasters. An HO-3 policy's primary benefit is its coverage for property damage. Also, it offers protection from injuries, legal liabilities, and the charges of living away from home in an emergency.

HO-3 and the magic of replacement cost coverage

A typical HO-3 policy often offers replacement cost coverage for your home and other structures. It implies that the insurer will pay for the insured structures to be rebuilt with materials at current prices up to your coverage limits. However, the same policy may only cover your personal property at its real cash value unless you add replacement cost coverage for personal belongings.

How to get an HO-3 insurance policy with Way.com

An HO-3 insurance policy protects the structure of your house from all hazards except those specifically mentioned.

The named peril coverage for your personal property is the only drawback to an HO-3 policy. It risks and places the burden of proof on you in case of a claim. Consider an HO-5 policy if you're concerned about your personal property or would want more comprehensive coverage alternatives. It will provide open-peril coverage for both your personal property and your home.

Are you planning to buy the best homeowners insurance policy? Then always use Way.com's app or website to find your area's perfect homeowners insurance policy at the most affordable rate. It doesn't matter whether you buy an HO-1, HO-3, or HO-5 policy, as long as it offers the coverage you require. If you need additional help, our home insurance agents in your area can help you. They will explain the most complicated home insurance rules, terms, coverages, and discounts. So, contact our agents if you need the best home insurance policy!

Looking for another type of homeowners policy? Here are the Seven different forms of homeowners insurance