HO3 vs. HO5 - Which one should you opt for?

by Guest » Fri May 22, 2009 06:52 pm

Home insurance requirement of an individual is definitely not the same as that of his neighbor. To fit the requirements of the individuals, the home insurance policies take different forms. HO3 and HO5 are two common home insurance policies which find use amongst the homeowners.

The basic difference between HO3 and HO5 policies

Standard homeowner's insurance offers coverage for the named perils only. The insured would only receive compensation if it is proved that the property damages or losses took place as a result of the named perils.
  • A HO-3 policy is a combination of an open peril and a named peril policy.
  • A HO-5 policy is an open peril policy.
To understand them better, you must know about open peril and named peril policies.

    What is an open peril policy?

    Insurance policy which offers coverage against almost all forms of risks that can cause damage to a property. Certain exclusions are however mentioned even in an open perils policy, which are not covered.

    What is a named peril policy?

    In a named peril policy, specific risks are mentioned against which the insurer provides coverage. If the property damages occur due to any other peril other than those mentioned in the policy, the insurers deny paying for the loss.


HO-3 - How it act likes a combination of open peril and named peril policy?

The HO3 policy acts like an open perils policy when it offers coverage against the property structure. This means the insurer will compensate for the damages to the structure of the insured building or residence, under any circumstances. However, if the damage is caused by any of the excluded peril, the insurers are not liable to pay for it.

The HO3 policy acts like a named peril policy when it offers coverage for the contents of the insured property. Loss or damages to the personal belongings of the homeowner and the home content will only be covered, if those have been caused by the specific perils as pointed out in the policy.Top

HO5 - How it acts like an open perils policy?

HO5 policy acts like an open perils policy, and doesn't discriminate between the home content and structure. Thus, no matter what kind of damage affects the insured property, this form of homeowner's insurance will offer protection. Coverage will only be denied if the cause behind the loss or damage is any one of the excluded perils, specifically mentioned in the policy.Top

Named perils for HO3 policy.

A standard HO3 policy offers coverage for 16 named perils as mentioned below:
  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 & Accidental Tearing Apart, Cracking, Burning, or Bulging
  15. Sudden & Accidental Damage from Artificially Generated Electric Current
  16. Accidental Discharge or Overflow of Water from Plumbing, Air conditioning etc.

Excluded perils for both HO3 and HO5 policy

The exclusions are more or less same for both HO3 and HO5 insurance policies as mentioned below:
  1. Power failure
  2. Industrial pollution or smoke
  3. Earth movement (earthquake)
  4. Water damage due to flood
  5. Intentional loss
  6. War
  7. Nuclear Accidents
  8. Pets and other animals, insects and pests
  9. Settling, wear and tear
  10. Act of negligence
  11. Actions taken by government and other associations
  12. Legal action due to lack of proper permits, defective construction, design or maintenance
  13. Theft or Damage from vandalism in vacant dwellings or in dwellings under construction
  14. Deterioration due to weather conditions, that aggravates other excluded causes of loss

Which is better?

HO3 and HO5 policies can be compared on the basis of certain parameters as mentioned below:
  • Coverage - A HO5 policy is considered better than a HO3 insurance policy as far as coverage is concerned. It is so, since the former ensures wider coverage for both the structure and the contents of the insured home.
  • Cost - A HO5 Policy is more expensive than a HO3 insurance policy. For those who are looking for an affordable coverage, HO3 policy seems to be the better choice.
  • Popularity - HO3 insurance policies are apparently more popular with the homeowners. It is economical and offers coverage against most of the common perils.

The limitations of the HO3 can be overcome, if additional endorsements are added on to the basic coverage. However, that will raise the costs.

If you've to pick between a HO3 and a HO5 policy, the latter ensures the better coverage. An open perils policy is evidently a better choice than a named perils policy.

All said and done, your preference between the two forms of policy will essentially be influenced by your financial limits and the extent of coverage that you need. Top

Related discussions

What is the difference between an HO3 policy and an HO5?

Total Comments: 49

Posted: Fri May 22, 2009 10:43 pm Post Subject:

About 2 HOs!

(dirty, clean AND funny!)

An HO5 is an all perils policy and the HO3 is a named perils policy. So I don't see any reason why it should at all be ho3 vs ho5 !!

Posted: Sat May 23, 2009 02:49 am Post Subject: ho3 vs ho5

tcope...that was great! Humor marks the intelligence of a man said Mark Twain!

About 2 HOs!

Don't forget that an HO3 is the Special Form that provides open peril coverage on the structure(s) and named perils coverage on the unscheduled personal property.

The HO5 typically just changes the coverage on contents to open perils, adds some extra coverage to the Special Limits on Personal Property portion of Coverage C and Hanan's comment was good info.

InsTeacher 8)

Posted: Sat May 23, 2009 12:41 pm Post Subject: ho3 vs ho5

Butt which is better?

A HO1, HO2, HO3, HO4 or HO5?

...and which cost more?

You couldn't give me a Properly and Casually license!

Posted: Sun May 24, 2009 01:33 pm Post Subject:

h05 is the 'golden policy' the ho5 typcially cost more..all structures do not qualify for an ho5 though

You couldn't give me a Properly and Casually license!

Well we're not a licensing body, but doubt anyone would till you learn how to spell...'property' ''causality' :wink:

Posted: Mon May 25, 2009 05:16 pm Post Subject:

The Homeowners-3 (HO-3) or Special Form Policy is the most widely used policy by homeowners writers today. It is becoming the standard homeowners policy and many lending institutions recommend buying it. This policy covers your home for all risks of physical loss, except those that are specifically excluded, such as flood, earthquake, war, nuclear accident, etc. Check your policy for a complete listing of the excluded perils. Coverage for loss of your home’s contents is also covered for many of the same perils for which your home is covered.

The Homeowners-5 (HO-5) policy or Comprehensive Form Policy protects your home against the same perils as the HO-3 policy. In addition, your personal possessions would also be covered for all risks of physical loss, except those risks that are specifically excluded. This extra protection may also be provided by purchasing a HO-3 policy with the “Special Personal Property” endorsement.

i think you now got what ho3 vs ho5 actually is .

Shadowking...we need to have a talk...while the information you supplied is correct...it was copy and pasted from the dept of ins website for NY (see link...and it's verbatim !!!!!!!!!!!)


If you are going to source another do so with the link to the page, or advise in your post that this is where you found the information...do NOT post it, like it came from you or your own brain, when it did not. When you don't source where the information came from it appears bad on a couple of levels...first it's plagiarism pure and simply...secondly it is against the TOU of this site ie:


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Thirdly it can appear that you are posting a lot of 'words' by copying and pasteing in an ill conceived effort to generate income...NOT a wise choice, as it will get you banned and in a hurry....but you understand you don't get paid to post anyway right? (you're outside the USA correct?)

I assume this was a mistake, and that's all it was...(this time :wink: )...please be more cautious and NEVER copy and paste anything without sourcing where it came from..thank you for your cooperation in advance, please don't hesitate to send me a pm if you have any additional questions.....lori

Posted: Tue May 26, 2009 07:43 am Post Subject: ho3 vs ho5

Hey Guest,

Welcome to our forums!

As you see a lot of it would depend on your needs actually.
Do you own a multi-family home?
Do you rent your home?


Posted: Wed Mar 24, 2010 05:58 pm Post Subject: HO5

Is this offered in Cailfornia and what is the estatimated premium on a homeowners Policy of $300,000?

Posted: Wed Mar 24, 2010 10:09 pm Post Subject:

Carolyn, We'd have no idea of a premium amount...you'll need to contact an agent...I can't imagine that an HO5 wouldn't be available in your state.

Posted: Tue Sep 07, 2010 07:53 pm Post Subject: Contents of others

My home burned completely, even most of the metal, and I had a friend whose tools were in my house as he was building a shower and cabinets for me, for hire. He does this as a side job and has no insurance coverage. Will my insurance policy cover his loss under liability coverage, contents coverage, or anywhere? The fire was not due to arson or an act of God. 90% chance it was electrical in origins according to the adjuster. I have an HO 5 Policy. Also, they are not offering replacement costs, which I thought were standard for HO 5 Policies.

Posted: Tue Sep 14, 2010 12:29 am Post Subject:

Sounds exactly like the post of an unlicensed cabinet maker, jrhillsboro, who was nearly done with the job when the homeowners went out of town and their home was destroyed along with their friend's tools due to an electrical fire.

While the damages to your home are going to be covered under your HO-5 policy, the tools of the contractor are not, because their damage/destruction was not due to your negligence . . . unless it can be proved that the electrical fire was the result of some appliance or implement that was left plugged in, like a curling iron or a space heater. Then there would be a remote possibility that the insurance company might cover the tools.

Too bad the tools were not yours, because your tools, used to maintain your property, just like cans of wall paint stored in the garage, are covered. Is there any possibility that your friend was using YOUR TOOLS to do the work you needed done? Just a question.

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