Is an HO-5 policy the right insurance for your home?
A home is the biggest investment most people will make in their lifetime, so it’s important to get the right homeowners insurance policy. If you want an all-encompassing policy, consider going with an HO-5.
The most comprehensive form of home insurance, an HO-5 policy is essentially the Cadillac option. It goes furthest in covering you, your home, and your valuables. Unlike HO-2 and HO-3 policies, which cover specifically named perils (causes of a loss), the HO-5 policy covers all perils unless they are explicitly listed in your policy as being excluded. This type of policy is known as “open peril.”
An HO-5 policy covers the physical structure of your home as well as any other structures, like fences, shed, or a detached garage. It also covers your personal belongings, insuring them against all threats unless specifically named by the policy.
Furthermore, an HO-5 policy basically removes the need to prove that damages were caused by a named peril, which can simplify the entire claims process. Some of the more common named perils that are covered by both HO-3 and HO-5 policies include the following:
| Insurance level | Property coverage against | Contents covered against |
| HO-5 Comprehensive Form | Open peril | Open peril |
An HO-5 policy will reimburse your primary dwelling at replacement cost value, while your personal property is reimbursed at either actual cost value or replacement cost value — depending on the specifics of your policy.
The HO-5 policy extends open-peril coverage to personal property as well. This means that you no longer have to prove that your property was damaged by one of the 16 named perils.
Personal property also includes items that have special coverage sub-limits. This is meant to encourage those with high-value items like jewelry, furniture, certain electronics, and paintings to seek out special insurance options for them. Below are standard limitations.
Sub-limit | Property | Limitations |
$200 | Money, gold, coins | |
$1,500 | Jewelry, watches, furs | Theft-only |
$1,500 | Watercraft, trailers | |
$2,500 | Firearms | Theft-only |
$2,500 | Silverware | Theft-only |
$2,500 | Business property | On-premises |
$500 | Business property | Off-premises |
Varies | Electronics |
If any item you own is above the sub-limit listed, you should consider adding an endorsement to your policy. An endorsement would increase the sub-limit level of any category of items. If you have one particular item of value, such as an engagement ring, you should consider a scheduled endorsement. A scheduled endorsement is specific to the one item and requires an appraisal. However, if the item is very valuable, it is the best way to ensure it is protected.
If a covered loss renders your home unlivable, this coverage provides for your living expenses for a certain amount of time or up to a certain monetary limit. This is sometimes known as "loss of use."
This coverage protects you should someone suffer bodily injury or property damage on your insured property. It even stretches beyond your property, providing protection for you in the event that your actions cause bodily injury or property damage anywhere. It covers medical expenses, lost wages, and pain and suffering.
Also known as “no-fault” or “goodwill” coverage, this coverage pays the medical expenses of individuals injured on your property. The base limit of this coverage is $1,000, though it can be increased. It may cover the cost of:
While the HO-5 policy offers the most protection than other home policies, there are still exclusions. They include the following:
*You can get flood insurance through FEMA in many states.
**Some policies allow the addition of limited mold damage coverage.
***You can add earthquake insurance separately.
In order to provide ample coverage and protect your investment, many insurance agents often encourage clients to opt for an HO-3 (Special Form Policy) or an HO-5 (Comprehensive Form Policy).The HO-5 policy can be more restrictive than the HO-3 and is usually reserved for newer or more expensive homes in areas that are better protected from fires.
If you are looking for more robust coveragefor your home, its contents, and its inhabitants, and your home fits the requirements, an HO-5 policy provides the most protection. For competitive homeowner’s insurance quotes, call 855-493-972 or click the link below.
