HO3 Home Insurance Policy

The HO3 Home Insurance Policy is one of the most common home insurance policies in the United States. It provides excellent coverage for the home and good coverage for personal property.

The HO3 insurance policy covers the actual physical structure you reside in (called the dwelling) and any outbuildings for open perils. This means that it will cover anything and everything that could damage the dwelling, with a few exceptions.

Those exceptions are listed in the policy. An open perils policy like the H03 specifically lists all perils your policy does not cover. If an event damages your dwelling that is not listed in the exclusion list, good news: it’s covered under the policy!

You are probably wondering what perils the HO3 policy excludes. Below is a list of perils that are typically excluded from dwelling coverage:

Although the list above is the default exclusion list for the HO3, there are some minor clarifications that need to be made.

First, most water damage is excluded, but not all. Sudden & Accidental Water Damage is covered by HO3 policies. Many of the other types of water damage, like Water Backup, can be endorsed onto the policy for an additional premium. You can learn about all the different types of water coverage here.

Second, some coverage for Collapse, for Mold, Fungus, or Wet Rot and for Ordinance or Law may be provided depending on the insurance company offering the HO3 insurance policy. It is not common, but some policies will include carve outs for these perils.

Third, Vandalism and Malicious Mischief is only excluded if the dwelling has been vacant for more than 60 days. If you are living in the home, this type of damage to the dwelling will typically be covered through the HO3.

Finally, just because the H03 excludes certain perils doesn’t mean you can’t get coverage for them. There are many companies that offer earthquake coverage today, which is normally excluded.

You are probably wondering what perils the HO3 policy excludes. Below is a list of perils that are typically excluded from dwelling coverage:

Three of the named perils above are only covered if the damage is caused as a result of a sudden and accidental event. Those are (1) the discharge and/or overflow of Water or Stream, (2) Cracking, Bulging, Burning or Tearing Apart, and (3) Artificially Generated Electrical Current.

Other than that, if a peril from the list above damages your stuff, the HO3 insurance policy should cover it.

Where does the HO3 policy stand compared to other policies? It’s near the top, but not at the top. Here is a quick look at other home insurance policies and how they stack up to the H03:

Less Coverage: HO1, HO2, HO8, HOA, HOA+

Roughly Equivalent Coverage: HOB

More Coverage: HO5, HOC