Better than Basic – The Difference Between HO3 and HO5 Homeowners Insurance

Imagine this. You go away for the weekend on a nice relaxing trip with the family. You make sure to schedule a massage, some time on the beach, a dinner at a nice restaurant, the works. Finally, after a well-deserved weekend off, you come home and all you want to do is sleep in your own bed. But you can’t.

You open the door to find a raccoon has weaseled its way through your doggy door and has subsequently torn up your living room and kitchen. Now your furniture has been mutilated, your flat screen TV has been knocked over and the screen cracked, the hard wood floors are all scratched up, the glass table has been shattered and you find holes in the walls where the animal panicked and tried to escape. Who would’ve thought so much damage could be caused by such a tiny animal? Not an HO3 policy, that’s for sure.

You may be thinking how unlikely it is for a scenario this extreme to occur, which is why a HO3 policy may seem like reasonable coverage. However, the future is an unpredictable place. These things do happen and they will end up costing you many future vacations in out of pocket costs. However, a HO5 policy can help you save those future getaways.

What’s the difference?

The main difference between the HO3 and HO5 policies is the perils they cover: named perils vs. open perils. Named perils are specific causes of damage and loss. Open perils include all causes of loss, unless they are specifically excluded.

A HO3 policy is seen as the most basic coverage and the contents of your home are only covered for 16 named perils.

  1. Theft
  2. Fire or Lightning
  3. Explosion
  4. Smoke
  5. Freezing
  6. Vehicles
  7. Falling Objects
  8. Volcanic Eruption
  9. Windstorm or Hail
  10. Riot or Civil Commotion
  11. Damage Caused by Aircraft
  12. Vandalism or Malicious Mischief
  13. Damage due to Weight of Ice, Snow, or Sleet
  14. Sudden and Accidental Tearing Apart, Cracking, Burning, or Bulging
  15. Sudden and Accidental Damage from Artificially Generated Electric Current
  16. Accidental Discharge or Overflow of Water from Plumbing, Air Conditioning, etc.

Though these policies cover very basic circumstances, there are more than 16 things that can happen to your home. And they’re sure to cost you a pretty penny. Now, enter, the HO5 policy.

Center Stage

A HO5 homeowners policy covers open perils, so they don’t have to be specifically outlined in the coverage plan, baring a few specific instances that are excluded. It’s a lot less limiting and can expand on existing coverage. Additionally, you won’t have to worry about proving that the damage was caused by one of the named perils on the HO3 list, which can take away some of stress from an already tumultuous situation.

One thing to note about HO5 insurance is that, due to its more broad nature, your home has to qualify to receive this form of homeowners insurance. Generally, homes that are newer, well maintained, have a higher value, and/or are protected by a fire/police station are the homes that are more likely to qualify.

The HO5 policy provides more protection and therefore will cost a bit more than the HO3 policy. However, the additional monthly cost is nowhere near what you could be paying out of pocket if something outside the named perils occurs to your home. Additionally, depending on the town you live in, your credit score and claims history, you may be able to qualify for close to the same price as a HO3 policy.

Be Prepared

If you qualify, it is recommended to take the HO5 policy. It provides better coverage, protects the contents of your home, prepares you for the unpredictable, and helps ensure that one specific instance doesn’t dictate your future or limit your financial security.


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  1. […] you can also expect for flood, earthquake or poor home maintenance damage to not be covered. Homeowners policies may exclude certain circumstances, whether they’re not a named peril or they are explicitly […]

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