Types of Home Insurance Policies

Home insurance isn’t one-size-fits-all. There are eight major policy types, and the differences between them decide whether you get paid after a loss—or get told your damage “isn’t covered under this form.” This guide cuts through the jargon and shows you which forms protect homeowners and which ones are landmines.

If you don’t know how your policy handles limits or exclusions, review the guide on policy limits before you assume your coverage type is doing more than it is.

1. HO-1: Bare-Minimum Coverage (Avoid It)

HO-1 is a stripped-down, named-peril policy that barely covers anything. It’s cheap for a reason. If the loss isn’t explicitly listed, you’re not getting paid. Most lenders won’t even allow HO-1 for mortgages.

• Only covers a short list of perils
• No protection for many common claims
• Belongings may have extremely limited coverage

2. HO-2: Better, but Still Limited

HO-2 expands the list of covered perils but still operates on a named-peril basis. Anything not listed is denied. Some homeowners buy this thinking it’s “standard”—it’s not.

• More coverage than HO-1
• Still not ideal for long-term risk
• Weak protection for personal property

3. HO-3: The Standard Policy (and Usually the Best Choice)

HO-3 is the workhorse of homeowners insurance. It covers the structure on an “open peril” basis—meaning everything is covered unless specifically excluded. Your belongings still use named-peril coverage, so you’ll want good documentation. Pair this with the documentation guide to avoid proof issues.

• Strong protection for the home itself
• Clear exclusions (flood, earthquake, wear and tear, etc.)
• Most homeowners carry this policy type

4. HO-4: Renters Insurance

An HO-4 covers tenants’ belongings and liability, not the building. If you rent out part of your home, don’t confuse this form with landlord insurance.

5. HO-5: Premium “Everything’s Covered Until It Isn’t” Protection

HO-5 is HO-3 without the limitations. It gives open-peril coverage for both the dwelling and your belongings. It’s the strongest standard policy available and minimizes claim disputes because fewer things require item-by-item proof.

• Best coverage for personal property
• Higher default limits
• Great for high-value homes

6. HO-6: Condo Unit Owner Policy

Covers the interior of your condo, improvements, personal property, and liability. The HOA’s master policy handles the exterior. You need to read both policies to see who’s covering which walls.

7. HO-7: For Manufactured and Mobile Homes

Similar to HO-3 but tailored for manufactured homes. Good coverage but must match the home’s installation, tie-downs, and condition—insurers reject risks that aren’t properly installed.

8. HO-8: For Older or Historic Homes

HO-8 is used when the cost to rebuild far exceeds the home’s market value. Coverage is more limited and often based on actual cash value. Claims here can get messy without strong documentation.

• Designed for homes with outdated wiring/plumbing
• May underpay if you expect modern replacement standards
• Often used when HO-3 is unavailable

Which Policy Should You Choose?

For most homeowners, HO-3 or HO-5 offers the strongest, least painful claim experience. HO-1 and HO-2 should be avoided unless you have no other option. If your home is older or unique, review the exclusions closely—or you’ll discover gaps the hard way.

When you’re comparing quotes, don’t treat these forms as interchangeable. The wrong policy type can cost you tens of thousands during a claim.