What is HO3 & HO5?
It's important to make sure that your home is protected by a homeowner's insurance policy.
At SUPREME we want you to understand the basic two main types of policies - HO3 and HO5.
The primary difference lies in the protection you get for your personal property. In simple words, personal property is everything that would fall out if you turned your home upside down.
Under an HO3 Policy, you get what's called Named Perils Coverage for your personal property. A peril is defined as a specific danger that could cause damage to your property. Anything not on the list is not covered. The burden of proof when submitting a claim is on the claimant, who must show that the loss was caused by a listed peril. Policies can vary by company, but a standard HO3 policy typically includes the following 16 named perils:
- Fire or Lightning
- Windstorm or Hail
- Explosion
- Riot or Civil Commotion
- Aircraft
- Vehicles
- Smoke
- Vandalism or Malicious Mischief
- Theft
- Volcanic Eruption
- Falling Objects
- A weight of ice, snow, or sleet
- Accidental Discharge or Overflow of Water or Stream
- Sudden & Accidental Tearing Apart, Cracking Burning or Bulging
- Freezing
- Sudden & Accidental Damage from Artificially Generated Electric Current
Under an HO5 Policy, you get what's called Open Perils Coverage for your personal property. Open Perils coverage means that the insurance company gives you a specific list of perils that are excluded. Anything not on the exclusion list is covered. Policies can vary by company, but a standard HO5 policy typically includes the following exclusions:
- Earth Movement (most companies offer this by endorsement)
- Ordinance or Law (most companies will give you a limited amount of coverage.)
- Water Damage - Flood, Water Backup Through Sewers & Drains, Sump Pump Failure (most companies offer water backup & sump pump failure coverage by endorsement. A flood insurance policy can be purchased separately)
- Power Failure
- Neglect
- War
- Nuclear Hazard
- Intentional Loss
- Government Action
- Theft In or To Dwelling Under Construction
- Vandalism or Malicious Mischief (when home has been vacant for a certain number of days)
- Mold, Fungus, or Wet Rot (some companies will give you a limited amount of coverage)
- Wear & Tear, Deterioration
- Mechanical Breakdown (some companies offer this by endorsement)
- Smog, Rust & Corrosion
- Smoke from Agricultural Smudging & Industrial Operations
- Discharge, Dispersal, Seepage of Pollutants
- Setting, Shrinking, Bulging or Expanding
- Birds, Vermin, Rodents, Insects
- Animals Owned by Insured