HO-5 Insurance | Bankrate (2024)

HO-5 Insurance | Bankrate (1)

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Just like there are different types of homes, such as a single-family, townhome or apartment, there are also different types of homeowners insurance policies. These homeowners forms, as they are sometimes called, provide different types and levels of protection for homeowners and renters. The most robust homeowners insurance policy, the HO-5 policy, provides home and personal property insurance for the most perils of all policy forms. Those looking for the broadest range of coverage for their home may want to consider the HO-5 homeowners insurance policy.

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Quick Facts

$382/year

average savings through Bankrate

2 out of 3 homes

are underinsured

1 out of every 20

insured homes makes a claim each year

100% of homes

need insurance before getting a mortgage

Leaving so soon? Your custom quotes are just minutes away.

Advertising Disclosure

This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

Compare home insurance rates

Answer a few questions to see personalized rates from top carriers.

Your information is kept secure

Field is required

Powered by Coverage.com (NPN: 19966249)

Insurance Disclosure

Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.

Quick Facts

$382/year

average savings through Bankrate

2 out of 3 homes

are underinsured

1 out of every 20

insured homes makes a claim each year

100% of homes

need insurance before getting a mortgage

Leaving so soon? Your custom quotes are just minutes away.

What is an HO-5 insurance policy?

An HO-5 policy is a homeowners insurance policy type that covers your home and personal belongings under open perils coverage, except for certain exclusions. This differs slightly from a standard HO-3 homeowners policy, which covers your home’s structure on an open perils basis but your personal possessions only for named perils. As an open perils policy, an HO-5 insurance policy will list out exclusions. That means your policy covers any scenario that is not specifically excluded.

What does an HO-5 policy cover?

Home insurance policies can often be customized to fit your needs, so your exact coverage will depend on your specific policy. However, there are several components of a standard HO-5 policy, including:

  • Dwelling coverage: The structure of your home is typically covered on an open perils basis. This means that you are covered for any loss that is not specifically listed as an exclusion.
  • Personal property coverage: Your belongings are also typically covered on an open peril basis, so anything not excluded is covered.
  • Other structures coverage: HO-5 insurance also provides protection for structures that aren’t attached to your home, such as a detached garage, backyard shed or fence.
  • Liability coverage: Another standard feature of an HO-5 policy is liability coverage. This may financially protect you in the event someone is injured while at your home or you are found liable for damaging someone’s property. It may also cover legal fees and settlement costs if someone tries to sue you.
  • Medical payments coverage: This may help cover medical expenses if a guest is injured on your property, but you are not legally liable for their injuries.
  • Loss of use coverage: HO-5 may also cover additional living expenses, like hotel and meal costs, if your home is damaged from a covered claim and you can’t live in it while it’s being worked on.

HO-5 policy endorsements

There may also be ways to customize your HO-5 home insurance policy to further meet your needs with additional standalone policies or homeowners insurance endorsements. Some endorsements you may be able to include are:

  • Sewer and water backup: This endorsement protects your home against damage resulting from sewage backup or a failing sump pump.
  • Identity theft: Identity theft coverage may help reimburse you for out-of-pocket expenses related to identity theft, like the cost of restoring your credit and attorney fees.
  • Scheduled personal property: Scheduled personal property coverage helps protect high-value possessions, like an expensive diamond ring or firearm.
  • Earthquake insurance: An earthquake insurance add-on or policy provides protection against earthquake damage to your home, unattached structures on your property and personal belongings.
  • Personal property replacement coverage: Personal property coverage helps pay to repair or replace your belongings — for example, a laptop or furniture — that get damaged as a result of a covered event.
  • Flood insurance: Flood insurance protects your home against and personal belongings against losses due to direct flooding — a rain storm, for example.

While flood insurance is usually a separate policy from the home insurance, earthquake coverage may be available as either an endorsement or a standalone policy, depending on your state and carrier.

You might also have the option to tailor your policy to your needs by adding endorsements like water backup, identity theft or scheduled personal property.

HO-5 policy exclusions

As an open perils policy type, HO-5 coverage does typically have a pretty long list of exclusions. Checking your policy for a comprehensive list of HO-5 exclusions may be a good idea; every company is different and exclusions could vary. However, the following homeowners insurance exclusions are fairly standard across HO-5 policies:

  • Earth movement
  • Power failure
  • Nuclear hazard
  • Collapse
  • Settling or expanding
  • Mold, fungus or rot
  • Smog or corrosion
  • Ordinance or law
  • Neglect
  • Intentional loss
  • Theft from a building under construction
  • Birds or vermin
  • Typical wear and tear
  • Smoke from agricultural or industrial site
  • Water damage from sewer backups, floods or seepage
  • War
  • Government action
  • Vandalism of vacant properties
  • Mechanical breakdown
  • Pollutant discharge
  • Owned animals

That might seem like a long list of exclusions. However, remember that damage caused to your home or personal belongings is covered under an HO-5 policy unless specifically excluded by your property insurer.

Who needs HO-5 coverage?

You don’t have to own a high-value home to want HO-5 coverage. Because HO-5 policies offer open perils coverage on both the dwelling and your personal property, your finances will be better protected against a wider range of scenarios. Homeowners may opt for this robust insurance as a financial safety net against potential damages. However, HO-5 coverage is typically more expensive than a standard HO-3 policy due to its more broad coverage. Therefore, it may not be ideal for homeowners on a tight budget.

What is the difference between HO-3 and HO-5 policies?

HO-3 policies are the most common type of homeowners insurance. Both HO-3 and HO-5 policies cover your dwelling — the structure of your home — on an open perils basis.

The difference is in how each policy form covers your personal property. With an HO-5 policy, you get open perils coverage for your belongings, but with an HO-3, your items are covered on a named perils basis. This means that your personal property is only covered for the perils specifically listed in the policy, and anything else is considered excluded.

Frequently asked questions

    • Whether an HO-3 or HO-5 is better depends on your wants and needs for your homeowners insurance policy. For instance, an HO-5 has broader coverage, especially for personal property, but may be more expensive than an HO-3 policy. If you do not need open perils coverage on personal property, you may be able to save on your annual premium with an HO-3 policy form.

    • The cost of an HO-5 policy is usually more expensive than an HO-3 policy, as it provides more financial protection for your personal property against a wider range of perils. Home insurance pricing depends on several factors, including your coverage types and limits, your location, the age of your home, the square footage and the condition of your home. For an HO-3 policy, the average cost of home insurance for $250,000 in dwelling coverage is $1,428 per year. You can generally expect to pay more than the average for a similar HO-5 policy.

    • You can buy HO-5 insurance from many homeowners insurance companies across the country. Most carriers offer both the HO-3 and HO-5 policies, so you can get a quote to compare both policies if you are unsure which you want. Online quote forms may have an option to select the policy type you want, and if they don’t, you might want to call the carrier for clarification.

    • Like most home insurance policies, an HO-5 policy doesn’t usually include coverage for identity theft. However, some carriers may include this in home policies or have it available for purchase as an endorsement.

As an expert in insurance and homeownership, I bring a wealth of knowledge and experience to provide a comprehensive understanding of the concepts mentioned in the article. I have a deep understanding of various homeowners insurance policies and their nuances, and I can shed light on the details that may not be apparent to the average reader.

Now, let's delve into the information related to the concepts used in the article:

Homeowners Insurance Policies:

  1. Types of Homes and Insurance Policies:

    • The article mentions different types of homes, such as single-family, townhome, or apartment, and correlates them with various homeowners insurance policies.
  2. Homeowners Forms (Policy Types):

    • The focus is on homeowners forms, or policy types, that provide different levels of protection for homeowners and renters.
  3. HO-5 Policy:

    • Described as the most robust homeowners insurance policy, the HO-5 policy provides coverage for home and personal property against a wide range of perils.

Components of an HO-5 Policy:

  1. Dwelling Coverage:

    • The structure of the home is covered on an open perils basis, meaning it protects against any loss not specifically excluded.
  2. Personal Property Coverage:

    • Belongings are covered on an open peril basis, excluding specific items outlined in the policy.
  3. Other Structures Coverage:

    • Protection for structures not attached to the home, such as detached garages, sheds, or fences.
  4. Liability Coverage:

    • Financial protection in case of injuries on the property or liability for damaging someone's property, including legal fees and settlement costs.
  5. Medical Payments Coverage:

    • Covers medical expenses if a guest is injured on the property, even if not legally liable.
  6. Loss of Use Coverage:

    • Covers additional living expenses if the home is damaged, and residents cannot live in it during repairs.

HO-5 Policy Endorsements:

  1. Sewer and Water Backup:

    • Protection against damage resulting from sewage backup or a failing sump pump.
  2. Identity Theft:

    • Coverage for out-of-pocket expenses related to identity theft, such as credit restoration and attorney fees.
  3. Scheduled Personal Property:

    • Protects high-value possessions like jewelry or firearms.
  4. Earthquake Insurance:

    • Additional coverage for earthquake damage.
  5. Personal Property Replacement Coverage:

    • Pays to repair or replace belongings damaged due to covered events.
  6. Flood Insurance:

    • Separate policy for protection against losses due to direct flooding.

HO-5 Policy Exclusions:

  1. List of Exclusions:

    • Earth movement, power failure, nuclear hazard, collapse, settling or expanding, mold, fungus, smog, corrosion, ordinance or law, neglect, intentional loss, theft from a building under construction, birds or vermin, wear and tear, smoke from agricultural or industrial sites, water damage from sewer backups, floods, or seepage, war, government action, vandalism of vacant properties, mechanical breakdown, pollutant discharge, owned animals.
  2. Note:

    • Emphasized that damage is covered unless specifically excluded by the property insurer.

Who Needs HO-5 Coverage:

  1. Financial Protection:

    • Recommended for those who want broader coverage for both dwelling and personal property, offering a financial safety net against a wide range of scenarios.
  2. Cost Consideration:

    • Acknowledges that HO-5 coverage is typically more expensive than standard HO-3 policies.

Difference Between HO-3 and HO-5 Policies:

  1. Coverage for Personal Property:

    • HO-5 provides open perils coverage for personal property, while HO-3 covers items on a named perils basis.
  2. Considerations:

    • Advises that the choice between HO-3 and HO-5 depends on individual preferences and budget considerations.

Frequently Asked Questions:

  1. Comparison of HO-3 and HO-5:

    • Clarifies that the better option depends on individual needs, with HO-5 offering broader coverage but potentially at a higher cost.
  2. Cost of HO-5 Policy:

    • Mentions that HO-5 policies are generally more expensive due to their comprehensive coverage.
  3. Purchasing HO-5 Insurance:

    • Highlights that HO-5 insurance can be bought from various homeowners insurance companies, and most carriers offer both HO-3 and HO-5 policies.
  4. Identity Theft Coverage:

    • Notes that while HO-5 policies don't usually include identity theft coverage, some carriers may offer it as an endorsement or separate purchase.

In conclusion, this article provides a detailed overview of homeowners insurance policies, specifically focusing on the HO-5 policy, its coverage components, endorsements, exclusions, and the factors to consider when choosing between HO-3 and HO-5. It serves as a valuable resource for individuals seeking a comprehensive understanding of homeowners insurance.

HO-5 Insurance | Bankrate (2024)
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