Evelyn PimplaskarEditor-in-Chief, Director of Content
10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.
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Protecting your home with insurance is critical, no matter the type of home you live in. Fortunately, home insurance comes in multiple types — called “forms” — to help ensure you have the right protection for your home, whether it’s a single-family house, a condo, or a rental apartment.
Here’s what to know about the types of homeowners insurance available and how to compare home insurance quotes to find the best deal for you.
8 types of homeowners insurance forms
Each type of home has some needs in common and some that are unique to the kind of residence.
For example, a standard homeowners insurance policy (HO-3) will include liability coverage and protection for the structure of the home. But a renters policy (HO-4) won’t cover the home structure, and a condo policy (HO-6) only covers part of the home structure.
Here are the eight types of homeowners insurance policies and how they work.
HO-1 insurance policies usually only provide dwelling protection. Some insurance companies may allow you to add personal property coverage at an additional cost. Most mortgage lenders don’t consider this type of policy to be adequate coverage, so if you’ve financed your home, an HO-1 policy is likely not an option.[1]
The simplest and least comprehensive type of homeowners insurance provides coverage for only a handful of potential problems:
HO-2 policies typically cover both dwelling protection and personal property. In some cases, they may also include personal liability coverage. But they still only cover the specific damages listed in the policy. For example, these policies cover water damage from steam but not from floods.
A broad form homeowners insurance policy will cover all the dangers included in basic form coverage, plus:
Falling objects
Weight of ice, snow, or sleet
Freezing of household systems, including HVAC systems
Sudden and accidental damage to pipes and other household systems
Accidental discharge or overflow of water or steam
Sudden and accidental damage from artificially generated electrical current
Special form policies are the most common type of homeowners insurance. HO-1 and HO-2 policies are examples of “named perils policies.” That means they only cover dangers that are specifically listed in the policy. HO-3 policies are “open peril policies.” That means they’ll cover all dangers except those specifically excluded in the policy documents.
Most HO-3 policies exclude the following types of damage:
Exclusions can vary depending on whether the insurer believes your home is at high risk for certain types of damage. For example, HO-3 policies on homes in areas at high risk of wildfires often have a fire damage exclusion.
HO-3 policies typically include dwelling protection coverage, other structures coverage, personal property coverage, and liability coverage — many will also include loss of use coverage. But the personal property coverage is usually limited to a narrower range of perils than the dwelling protection coverage.
HO-4 policies, more commonly known as renters insurance, are for people who rent rather than own their homes. Renters insurance policies typically cover all the same dangers as HO-2 policies. These policies include personal property coverage and liability coverage but don’t cover the physical structure of the house. Some HO-4 policies may also include loss of use coverage for the tenant.
Comprehensive form policies are usually the broadest and provide the highest level of coverage; not surprisingly, they also tend to be the most expensive type of homeowners insurance policies.
The biggest difference between HO-3 and HO-5 policies is that most HO-3 policies are “actual cash value” policies, whereas HO-5 policies are typically “replacement cost value” policies. An actual cash value policy will only reimburse you for the actual value of a damaged or destroyed item, while a replacement cost value policy will reimburse you for however much it would cost to completely replace or repair the damaged or destroyed item (up to the coverage limits on the policy).
HO-5 policies also provide personal property coverage against a wider range of dangers than the typical HO-3 policy. Many HO-5 policies also have extra coverage for high-value personal property, such as jewelry and artwork.
Not surprisingly, condo form insurance is for condominium owners. HO-6 policies generally protect against the same types of dangers as HO-3 policies. They provide dwelling protection coverage with a twist: HO-6 policies cover the walls, floors, and ceiling of the condo unit but not the rest of the building. These policies also include personal property and liability coverage and may include loss of use coverage.
HO-6 policies also apply to other types of co-op living. Generally, a condo association or HOA will cover property damage in common areas but will also require unit owners to hold condo insurance for their units.
If you own a mobile home or manufactured home, you likely have an HO-7 policy. Mobile home form policies are typically identical to HO-3 policies, except they’re designed specifically for mobile and manufactured homes. Like HO-3 policies, they provide dwelling protection coverage, other structures coverage, personal property coverage, liability coverage, and possibly loss of use coverage as well.
HO-7 policies generally only protect the home when it’s stationary; if you plan to move your mobile or manufactured home, you’ll need to get a special policy to cover it while it’s in transit. It’s important to remember that mobile home insurance and insurance for RVs are different, so make sure you’ve selected the right category.
HO-8 policies cover homes that are 40 years old or older.[2] The cost to rebuild an older home may exceed the value of the house — especially if the home has special architectural features. To make coverage more affordable for owners of historic homes, HO-8 policies pay out claims based on a home’s actual cash value rather than its replacement cost value.
While an HO-8 policy provides largely the same coverage as a standard homeowners insurance policy, it can cost more. And if a covered event damages or destroys your home, your actual cash value payout may not be enough to fully repair or rebuild.
The coverage parts of a homeowners insurance policy
A homeowners insurance policy may include as many as five different coverage categories. The basic coverages for homeowners insurance are:
Dwelling coverage
Dwelling coverage protects the physical structure of your home. Your policy covers financial protection for damage to your home.
Other structures coverage
Other structures coverage protects structures on your property that aren’t directly attached to your house, such as fences and sheds.
Personal property coverage
Personal property coverage protects the personal belongings inside your home. Basically, anything inside the house but not attached to it is considered personal property.
Loss of use coverage
If you can’t live in your home temporarily because it’s been damaged, loss of use coverage will reimburse you for some or all of your relocation expenses (such as hotels and restaurants). These generally fall into a category known as “additional living expenses.”
Personal liability coverage
If someone sues you because of damage or injury they suffered on your property, personal liability insurance may help with related expenses. It might also cover the medical payments of someone injured on your property.
Each of the eight different types of homeowners insurance policy forms provides different types of coverage within these five basic categories.
When it comes to replacement cost insurance, the level of coverage you choose affects the amount of compensation you receive. You’ll generally have the opportunity to choose from the following three options:
Actual cash value: Actual cash value reimburses you for losses based on the current value of the home or items, including depreciated value.
Replacement cost value: Replacement cost coverage pays for the total replacement cost of your home and belongings in the event of damage or destruction. It doesn’t consider depreciation.
Guaranteed (or extended) replacement cost: A tier above replacement cost coverage, guaranteed replacement cost insurance may pay you the full cost of replacing your house and belongings after a covered event, even if the amount is above your policy limits.
Open perils vs. named perils
The way your home insurance policy covers different perils can vary dramatically. Home insurance policies use either an open or named peril policy.
An open peril policy will cover damage to your home caused by any peril except those specifically outlined as excluded in the policy. Flooding, for example, is commonly excluded from home insurance policies.
A named peril policy covers only damages sustained from perils specifically listed in the policy. Here are perils most homeowners policies cover:
Windstorm and hail
Hail and wind can cause damage to roofs and the structure of your home. This type of damage accounts for nearly 46% of property damage claims, according to the Insurance Information Institute (Triple-I).
Most home insurance policies cover damage from wind and hail. But if you live in an area with a high risk of this kind of weather event, your policy may have a separate deductible for damage from wind or hail.
Fire and lightning
Most homeowners policies will cover damage from lightning and from fire, no matter how it starts. Nearly 24% of property damage claims are for fire and lightning, Triple-I reports.
If you live in an area at high risk from wildfires, it may be difficult to find affordable home insurance that covers wildfire damage. If you can’t get coverage from the standard insurance market, you should check if your state has a FAIR Plan.
Explosion
Gas leaks, faulty appliances, and human error can lead to explosions in a home. Most homeowners policies will pay to repair or rebuild your house if an explosion occurs.
Smoke
If a fire breaks out in your home, smoke can cause significant damage even if the fire doesn’t. Homeowners insurance will typically pay to repair damage from smoke.
Riots
Homeowners insurance policies commonly cover damage to your home’s structure or your belongings that stems from riots or civil unrest in your community.[3]
Vandalism
In most cases, your home insurance policy will cover damage from vandalism. But if the vandalism occurred while your home was vacant for an extended period or a member of your household caused the damage, your policy may not cover vandalism.
Theft
Homeowners insurance protects your possessions. If someone breaks into your house, apartment, or condo and steals your property, your homeowners insurance will pay to replace it. Theft accounts for less than 1% of property claims, according to Triple-I.
Weight of ice, sleet, and snow
Accumulations of snow and ice can cause structural problems in roofs — especially flat roofs or ones with a low pitch.[4] If heavy snow, ice, or sleet damages your roof or causes it to collapse, your homeowners insurance can pay for repairs.
Volcanic eruptions
Americans face risks from 54 active volcanoes across the states and U.S. territories.[5] If a volcanic eruption causes damage to your home or destroys it, your homeowners insurance will pay to repair or rebuild.
Falling objects/damage from aircraft
Objects like trees and branches can fall on your home, causing damage. If that occurs, your homeowners insurance generally covers the cost of repairs. This even applies to damage from an aircraft or aircraft parts that may fall from the sky.
Damage from vehicles
Vehicles crash into buildings, including homes, about 100 times a day in the U.S.[6] If a vehicle hits your house, your homeowners insurance will pay to repair the damage.
Accidental discharge of water
While homeowners insurance doesn’t cover damage from weather-related flooding, it does pay for water damage from situations like a burst pipe or leaking water heater.
Accidental tearing apart, cracking, etc.
If your home’s structure or foundation cracks, separates, or is otherwise damaged by a covered event, your homeowners insurance can pay for repairs. But it generally won’t pay for cracks, tears, and other damage that arise from normal wear and tear.
Freezing of appliances or HVAC
Extreme cold can damage appliances and important home systems. If that happens, your homeowners insurance may cover the cost of repairing the damage.
Artificially generated electrical currents
If a power surge causes damage in your home, your home insurance may cover the cost of repairs, depending on how the surge occurred.
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Additional coverage options for homeowners
Standard home insurance coverage won’t protect you from every peril. Fortunately, you can purchase additional optional coverage through riders or separate policies, including the ones below.
Flooding is the nation’s single most common disaster, and 90% of all disasters include flooding. But if you want to protect your home from flood damage, you’ll need to purchase separate flood insurance. If you have a federally backed mortgage, like a Federal Housing Administration (FHA) or Veterans Administration (VA) loan, your lender will require you to buy flood insurance.
Until recently, the National Flood Insurance Program (NFIP) through FEMA — the Federal Emergency Management Agency — was the only source of flood insurance coverage. It’s now possible to buy comparable flood insurance coverage from private insurance companies in a few states.
Standard home insurance policies don’t cover earthquakes. Fortunately, you may buy earthquake coverage from private insurance companies, either as a separate plan or as an endorsement to your homeowners insurance policy.
If an earthquake damages your home or belongings, you can file a claim with this coverage. You may need to pay a deductible, which is the out-of-pocket cost you’ll pay before coverage kicks in.
Depending on what’s included, your policy may also pay for temporary housing if the earthquake damage to your home forces you to relocate.
Umbrella insurance is extra personal liability coverage that you can add to your homeowners insurance policy. It covers liability claims for injury or property damage to others. An umbrella liability policy doesn’t offer coverage for you or your household members for bodily injury or damage to personal property. But it does provide a safety net if the costs associated with an incident go beyond your standard liability coverage.
Sewer backup insurance helps cover the cost of damage caused by the backup, protecting you up to your policy limit. You’ll set this limit when you buy the insurance. This coverage can pay to remove excess water from your home, repair damaged structures (like wood and drywall), and replace personal property. This insurance also includes loss of use coverage, so if you have to stay somewhere else because of the damage, your living expenses will be covered.
This coverage is part of many home insurance policies but can be a good rider to have if your policy doesn’t include it. Medical payments coverage pays for expenses related to injuries guests may suffer while on your property, regardless of fault. Most policies provide $1,000 to $5,000 of coverage, but you may be able to adjust the limits to meet your needs.
This add-on to a standard home insurance policy will help pay for upgrades or repairs needed to bring your home in line with local building codes. But it only applies if a covered event damages your home first, and not every insurer sells this coverage.
If you have valuable belongings like expensive jewelry, antiques, or an art collection, you can add scheduled personal property coverage to your policy. Most homeowners insurance provides some coverage for your belongings, but it might not be enough to cover the cost of replacing high-worth valuables.
How to choose a homeowners insurance policy
Several options are available when it comes to homeowners insurance. Consider the following factors as you compare different homeowners insurance policies:
Location: Your home’s location affects your insurance needs. For instance, if you live in a climate with cold weather, you’ll want a policy that covers damage from freezing and snow.
The condition of the property: The home inspection process can give you a good idea of which parts of your home might be older and at a higher risk for damage. For instance, a house with an older frame might need robust coverage for wind damage.
The property’s claims history: After you buy a home, ask the seller for a CLUE or A-PLUS Report, which outlines the home’s claims history. Understanding the home’s past claims can help you better understand what kind of policy you need.
Price: Once you know the type of policy you need, it’s time to compare prices. Comparing prices of similar policies from a wide array of insurance companies helps you get the best value. You might even find that a certain company offers a discount you qualify for.
Company reviews: Before you commit to a company, you should read some reviews from customers. Make sure you’re working with a company with robust knowledge about your area, trustworthiness, and responsiveness.
Comparing home insurance rates from a wide range of insurers can help you find the best value. Start with an idea of your coverage needs and budget. Then employ an online comparison tool to compare insurers against one another and against your needs.
Then, go deeper with your search, toggling between different coverage options and comparing discounts from different companies. In just a few clicks, you can find the best coverage option for your home.
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What factors affect homeowners insurance rates?
Many factors influence how much you’ll pay for homeowners insurance, including:
Where you live: If you live in an area with high crime rates, you might pay more, given the higher risk of theft or vandalism to your property.
Location: You may pay more if your home is far from a fire department, police department, or water supply source.
Age and construction: Your home’s age and construction type (such as a brick versus a frame house) will affect your home insurance costs. For example, older homes generally cost more to insure — especially if they have materials or features that’d be expensive to replace at today’s market prices.
Coverage limits: The amount of coverage you buy will affect your rates. If you buy a more robust coverage package, you’ll end up paying more. You can offset this high price by increasing your deductible to reduce your monthly premiums.
Discounts: Many insurance companies offer discounts for certain homes. For instance, homes with safety features like alarm systems can qualify you for lower premiums. You can also bundle your car insurance and homeowners insurance with the same company to unlock savings.
Types of homeowners insurance FAQs
A variety of home insurance policy types are available to protect virtually every type of home. Here are some answers to commonly asked questions about types of homeowners insurance.
What are the three main types of homeowners insurance?
HO-2, HO-3, and HO-4 are probably the most common types of home insurance. HO-2 and HO-3 policies cover single-family dwellings, while HO-4 policies are for renters.
What numbers matter when you’re comparing home insurance quotes?
While your premium is an important consideration, an affordable number is only part of a good homeowners policy. Be sure your dwelling coverage limit is sufficient to fully rebuild your home, if needed, and that your liability and personal property coverages are adequate.
What’s the difference between HO-3, HO-4, and HO-6 policies?
HO-3 policies are the most common type of homeowners insurance policy. They cover single-family dwellings and are “open-peril policies,” meaning they cover more types of perils. An HO-4 policy, or tenants form, is for people living in rental properties. HO-6 policies are for condo owners.
What’s the 80% rule in homeowners insurance?
The 80% rule — also known as the 80/20 rule — is an insurance industry standard. It stipulates that you should insure your home for at least 80% of its replacement cost. If you insure your home for less than that, your insurer might deny a claim or pay you less than the full claim amount.
Who would use an HO-6 homeowners form?
If you own and live in a condo, you’d insure it with an HO-6 policy. HO-6 policies provide liability, personal property, and loss-of-use coverage. But they only cover a unit’s walls, floors, and ceiling, not the rest of the building.
Slate. "Never Mind the Bollards: How many times a day do cars crash into buildings?."
Evelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar is Insurify’s director of content. With 30-plus years in content creation – including 10 years specializing in personal finance – Evelyn’s done everything from covering volatile local elections as a beat reporter to building fintech content libraries from the ground up.
Before joining Insurify, she was editor-in-chief at Credible, where she launched and developed the lending marketplace’s media partnership’s content initiative and managed the restructuring of the editorial team to enhance content production efficiency. Formerly, as tax editor for Credit Karma, Evelyn built a library of more than 300 educational articles on federal and state taxes, achieving triple-digit year-over-year growth in e-files from organic search.
Her early career included work as a content marketer, vice president and managing officer of a boutique public relations agency, chief copy editor for 14 weekly Forbes publications, reporting for large and mid-sized daily newspapers, and freelancing for the Associated Press.
Evelyn is passionate about creating personal finance content that distills complex topics into relatable, easy-to-understand stories. She believes great content helps empower readers with the information they need to make important personal finance decisions.
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
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