Types of Homeowners Insurance

The following is a list of various types of homeowner, rental and dwelling policies available. There are no fixed rules on each designation - every company creates their own policy that will generally conforms to this list, but there may be differences in coverage and in perils excluded from coverage.

Homeowner Policies

The Insurance Services Office, ISO, a provider of underwriting, risk management and legal/regulatory services, has defined seven standardized homeowners insurance forms in general and consistent use. These include:

HO1

A basic policy that provides coverage on a home against 11 listed perils (including fire, lightning, windstorm or hail, explosion, riot, aircraft, vehicles, smoke, vandalism, theft, breakage of glass and volcanic eruption). Contents are generally included in this type of coverage, but must be specifically outlined in the policy, as are "other structures" (detached garages, gazebos, sheds, etc.), loss of use, and liability.

HO2

A more advanced policy that provides coverage on a home against 17 listed perils (including all of HO1 and freezing of plumbing, accidental discharge or overflow of water from an appliance or plumbing system, collapse due to weight of ice, snow or sleet, damage from falling objects, sudden and accidental tearing apart of systems or appliances, and damage from sudden surges of artificially generated electric current. The coverage is usually a "named perils" policy, which lists the events that would be covered.

HO3

The standard policy issued for single-family homes. This provides "all risk" coverage on the home with some perils excepted, such as earthquake and flood, and therefore provides the most comprehensive insurance. This kind of insurance includes liability that may arise from daily use, as well as any visitors who may encounter accident or injury on the premises as well as loss of use.

HO4

A policy used for renters or tenants in an apartment, condo or multi-family home. Principal coverage includes contents and liability exposure.

HO5

A comprehensive homeowner’s policy that provides all-risk coverage for the home, other structures, personal property, and loss of use. This kind of coverage is available in limited circumstances.

HO6

A policy used for a condominium. This type of policy is based upon the assumption that the condominium building is insured by the overall organization that runs the complex. Principal coverage includes contents, furnishings, cabinets, fixtures, and personal liability for accidents within the unit.

HO8

This is a variation of the standard homeowners policy that provides for replacement at actual-cash-value of the home because of their location or construction. This is sometimes used for higher value homes that have unique features, such as ornate moldings, that cannot be effectively replaced with modern construction techniques or materials.

Dwelling Policies

There are three general dwelling property insurance policies for secondary homes or rental properties. These policies are also typically issued on houses of non-standard construction, or very old homes. All of these policies cover the basic structure of the home or dwelling. They include:

DP1 or Basic Form

A basic policy that provides minimum coverage on a home. It is the most popular kind of insurance used for rental properties. DP1’s covers dwelling, other structures on the property against fire or lightning and internal explosions. It does not cover loss of use, personal property or additional living expenses.

DP2 or Broad Form

A more inclusive policy that provides coverage on a home for dwelling, "other structures" (detached garages, gazebos, sheds, etc.), household/personal property, rental value and additional living expense. It provides coverage against loss by fire or lightning; debris removal; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; falling objects; weight of ice, snow or sleet; collapse of building, vandalism or malicious mischief, breakage of glass, accidental discharge of water or steam, freezing of plumbing, heating systems or appliances, burglary damage, fire and lightning.

DP3 or Special Form

This provides "all risk" coverage on the home with some perils, like theft coverage for personal property or liability/medical payments coverage. This kind of coverage provides the most comprehensive insurance.

Any additional protections are options that are offered only at the discretion of the insuring company, and you should inquire before settling.

For landlords, umbrella policies are especially crucial. If one of your tenant’s clumsy friends breaks an arm falling down stairs, there could be significant additional costs above standard liability.