Homeowner's Insurance Policy

Definition of "Homeowner's insurance policy"

Shon McGuire real estate agent

Written by

Shon McGuireelite badge icon

Adams Cameron & Co. Realtors


Homeowner’s insurance is a kind of property insurance that covers risks commonly encountered by homeowners.

There are several kinds of homeowner’s insurance policies:

Homeowners-1 (HO-1) - the most basic coverage. Basically, HO-1 provides homeowners protection against catastrophic losses only. HO-1 is a Named Peril Policy, that is; a policy that specifies exactly what it covers.

Homeowners-2 (HO-2) - known as a mid-range policy, the HO-2 provides broader coverage than the HO-1, but it’s not as robust as the HO-3, for instance. It is also a named peril policy.

Homeowners-3 (HO-3) - is the most common homeowner’s policy in the US. The HO-3 is midway between a named perils policy and an open perils policy. That is because under the HO-3, your personal properties (appliances, furniture, cars…) are insured via named perils but the house itself is insured under an Open Peril Policy, which is a list of exclusions of damages insured by the policy. If it’s not on the list, the insurance will cover it.

Homeowners-4 (HO-4) - also known as renter’s insurance,  the HO-4 is a policy made for people renting a property.

Homeowners-5 (HO-5) - the HO-5 is one of the most comprehensive homeowner's insurance available. An elite policy, the HO-5 is an upgraded version of HO-3, as it also includes the personal properties under the open perils policy and not just the house.

Homeowners-6 (HO-6) - the HO-6 is for people renting condos and townhomes. Also known as the condo insurance or the townhome insurance, the HO-6 is similar to the HO-4 in scope, but it deviates from it regarding the way some aspects are calculated.

Homeowners-8 (HO-8) - the HO-8 is designed to protect older homes and remodeled buildings that are difficult to replace if destroyed. It is similar to HO-1 as it is also a basic coverage, but the HO-1 usually evaluates the house via replacement cost approach, whereas it’s difficult to do that with HO-8, which typically uses the actual cash value.

 

Real Estate Advice:

Search our Glossary Terms
 for the specific definitions of all the types of homeowner's insurance.

And find a real estate agent to help you decide which type of homeowner's insurance is the best for you.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

Contractual provision requiring apportionment. ...

Interest is due on a loan only if a particular circumstance occurs. ...

In conducting a real estate transaction, each party is presumed honest and fair with no deceit. The intentions are honorable and realistic. If deception occurs without prior knowledge, the ...

Equals the tax divided by taxable income. Foe example, if the tax is $30,000 on taxable income of $120,000 the effective tax rate if the business is 25% ($30,000/$120,000) ...

Fluctuation in sales, profits, rat of return, etc. Likelihood of declining value. ...

Approach to appraise rental property based on anticipated future earnings to be derived from it plus the estimated selling price at the end of he period held. ...

An agreement, debt, or low which can be operationalized, fulfilled, completed, or performed. ...

Founded in1934 and located in Chicago, IL with a 1993 membership of 8,300, the IAAO seeks to ameliorate assessment standards as well as to perform ongoing property assessment research. The ...

Square footage of space a parcel of land has. ...

Popular Real Estate Questions