Understanding the Difference Between HO-3 and HO-5 Home Policies

 

What you need to know about the different coverage levels of HO-3 and HO-5 home insurance policies.

When it comes to homeowners insurance in Michigan, many people assume that all policies are the same.  However, this isn’t the case.  In fact, there are actually different categories of home insurance that offer various levels of coverage.  For instance, when it comes to insuring traditional homes, homeowners have the option to secure an HO-3 or an HO-5 policy.  But how are these policies differ, and which type is better for you? Here’s what you need to know about HO-3 and HO-5 homeowners insurance policies.

  • HO-3 Home Insurance

HO-3 home insurance policies are also known as “special form” policies.  These policies are the most common type of homeowners insurance because they offer a broad range of coverage for a relatively affordable price.  HO-3 policies offer a combination of open peril and named peril coverages.  For instance, HO-3 policies offer open peril dwelling coverage.  This means that they offer coverage for any structural damages a home may sustain unless the damage was caused by an excluded peril. However, when it comes to personal property coverage, HO-3 policies act like a named peril policy.  This means that the homeowner’s belongings are only covered against the specific perils listed in the policy.

  • HO-5 Home Insurance

HO-5 home insurance policies are also known as “comprehensive form” policies.  These policies are true open peril policies, meaning that they offer dwelling and personal property coverage for all perils, except those specifically excluded on the policy.  Because HO-5 policies offer more coverage than HO-3 policies, they are more expensive. However, if you are looking for the best protection for your home and your personal possessions, then it may be worth investing in an HO-5 home insurance policy.

Do you have additional questions about your homeowners insurance in Michigan? If so, then contact the experts at CIA Insurance and Risk Management.  Our dedicated team is eager to assist you with all your coverage needs today.

Post written by Sam Crudo, Chief Executive Officer

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