An HO-3 insurance policy is a type of home insurance designed for homeowners who seek coverage for their home and properties contained in the home. This type of insurance policy offers coverage for a wide range of risks stated in your policy.
An HO-3 policy covers your home and other properties on an open-peril and named peril basis. The coverage option is written on an open-peril basis, meaning it covers any type of peril unless it is included in your policy.
On the flip side, named perils coverage typically denotes that the policy only covers damage incurred to your home and properties in the event of any type of risk included in your policy.
What You Should Know About HO-3 Insurance Policy
One of the primary things you need to be aware of is the fact that HO-3 insurance policy is mainly for owner-occupied homes. This is because this policy provides affordable and reliable coverage for the littlest to the biggest type of risk.
Also, the coverage you get on your HO-3 insurance policy largely depends on your insurance company and how much coverage you need to protect your home.
What Does HO-3 Insurance Policy Cover?
An HO-3 policy is capable of paying for the following:
- Damage to the home.
- Damage to structures on your property, such as garages or fences.
- Damage to personal belongings like furniture and clothes.
- Damage caused by theft.
- Legal expenses if you are sued for causing injury or damage to someone’s property.
- Additional living expenses in a situation where the house is inhabitable and you have to move temporarily. (Note that the peril has to be included in your policy to enjoy this coverage)
- Medical payments in the event of your guest getting injured.
These are the basic coverages an HO-3 insurance policy offers to policyholders. When shopping for this type of home insurance policy, it is advisable to choose an insurance company that offers the best rate and coverage options that align with your unique needs and budget.
What Is Not Covered By An HO-3 Policy?
Despite the wide range of coverage options that HO-3 insurance policy provides, there are perils your policy will most likely not cover. For homes and other structures, it falls under open-peril policy, and this means that your insurer will pay for the damage unless caused by an event excluded from your policy. That being said, HO-3 policy will not cover:
- Flood
- Earthquake
- Sinkholes
- Wear and tear.
- Corrosion
- Damage from pets.
- Sewer back up.
- Government intervention.
- Damage caused by lack of maintenance.
- Rust or mold.
When purchasing an HO-3 policy, it is important to know what your policy covers and what it does not. This will enable you to know what to expect in the event of a claim.
Nevertheless, the coverage options on your H0-3 insurance policy provide protection for your personal belongings on a named-peril basis. This means that your insurance provider will only pay for the damage caused by events included in your policy. Highlighted below are 16 named perils listed on an HO-3 policy.
- Fire
- Theft
- Explosion
- Vandalism
- Smoke
- Windstorms
- Falling objects.
- Weight of ice or snow.
- Riots or civil commotion.
- Damage from vehicles.
- Accidental water damage.
- Damage from aircraft.
- Freezing of household systems like pipes.
- Volcanic eruptions.
- Accidental damage to certain household equipment.
- Accident damage caused by artificially generated electrical current.
How to Get a HO-3 Insurance Policy
HO-3 insurance policy offers a wide range of benefits to homeowners, hence why it is one of the most sought-after home insurance coverage currently. Before purchasing HO-3 coverage, it is important to have a basic understanding of how it works and what the policy covers.
Once you’ve decided that this type of policy is the best option for you, start by shopping around to compare quotes and coverage options. By doing this, you have the opportunity to weigh your options and decide on which insurer to work with.
FAQs
What is the best home insurance company for HO-3 insurance policy?
Well, the answer to this question depends on so many factors. The decision of what an ideal home insurance company is solely dependent on the amount of coverage you need and the location of your home.
It also depends on your budget and the type of customer service you’re on the lookout for. When determining the best home insurance company to work with, factor in these important points. It would help you make an informed choice on which insurance company to opt for.
How much does the HO-3 insurance policy cost?
The cost of an HO-3 insurance policy varies across different insurance companies. Because insurance companies are not the same, there may be a slight difference in the cost of HO-3 coverage.
Most insurance companies set premiums based on the location of your house, age of the home and roof, square footage, cost of building materials, etc.
In essence, the cost of an HO-3 depends on your state, insurance company, and, of course, your credit and claim history. Due to all of these factors, it is advisable to shop around to see which insurer offers the best rate.
