The Differences Between an HO-3 Home Insurance Policy & an HO-5 Policy

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Insurance 101: Tips and Tricks to Choosing the Right Policy

Since my parents always added me to their auto insurance policy when I was a teenager, I never learned how to make educated insurance policy decisions. When I moved out of my parents house at the age of 25 and it was time to get my own policy, I was overwhelmed with all of the decisions I had to make. Thankfully, my parents were eager to teach me what each insurance coverage option meant and what the best choices were for me. I learned a lot about insurance during this experience, and I am eager to share what I learned with others on my new blog. I also plan to include many tips on choosing health and homeowners insurance policies, so check back often if you want to learn a little more about insurance!


The Differences Between an HO-3 Home Insurance Policy & an HO-5 Policy

31 May 2019
 Categories: Insurance, Blog

If you are interested in getting an insurance quote for homeowner's coverage, you may want to compare two different types of common homeowner's insurance policy types. These types are called HO-3 policies and HO-5 policies, and while they have some similarities, there are also some differences with them that you should know about.

The basics of an HO-3 policy

An HO-3 homeowner's insurance policy is the most common and basic form of home insurance coverage you can purchase when you own a house. This type of policy generally offers just enough protection for your home and belongings that you would need if your home was damaged or destroyed. Most HO-3 policies offer coverage for damages that result from typical events that could affect anyone, but it will depend on the open perils and named perils on your policy.

When you have an HO-3 policy, you will have a combination of open perils and named perils. With open perils, it means that you will have protection over damages caused by anything unless your policy lists exclusions. With named perils, it means that you will only get coverage for the events that are named.

The basics of an HO-5 policy

An HO-5 insurance policy will not only offer the same coverage types and protection as an HO-3 policy, but it will also offer additional coverage. With an HO-5 policy, you have a policy that is completely an open-peril policy. This means that everything is covered with your policy except anything that is named. With an open-peril policy, it is typical for the exclusions to include damage from hurricanes, floods, and earthquakes, while almost all other types of causes of damage will be covered.

The key takeaway from these differences

When choosing between these two policies, there are two main factors to consider. The first is the costs. If you want the most affordable policy, you would want to choose the HO-3 policy, as it will always cost less than an HO-5 policy. The second factor to consider is the amount of coverage you want in your policy. If you want the most coverage possible, choosing an HO-5 policy would be the better option for you.

Choosing the right homeowner's insurance policy is important, so you should always talk to an insurance agent to find out which is the best option for you. To do this, call a local homeowner's insurance agency today.