What are Standard Coverages for Home Insurance?

Home insurance often sounds complicated, but it’s actually pretty simple as long as you have good sources and plenty of time to research. There are many types of home insurance policies from HO-1 to HO-8.

Perfectly manicured suburban street on a beautiful clear September day.

HO-3 is the most common home insurance policy. It covers:

  • Dwelling Coverage: Dwelling coverage provides compensation if the dwelling and its attached structures are lost or damaged due to fire, storms, hail, explosions, theft, vandalism and more.
  • Personal Belongings Coverage: Personal belongings coverage covers the same incidents as dwelling coverage for your personal belongings. There are limits on certain items such as jewelry, art and furs that may require floaters, which attach to your policy.
  • Additional Living Expenses: Additional living expenses (ALE) help with the cost of temporarily moving while your home is being repaired after a disaster.
  • Liability: Personal liability insurance steps in if you or a family member causes bodily injury or property damage to someone else. It can help with medical expenses, property repair or possible legal fees if the victim decides to sue.

The big difference between HO-3 and other policies are the type of perils covered. While most coverages go by named perils, HO-3 covers unnamed perils, as well.

Difference Between Named Perils and Unnamed Perils

A named perils policy is a policy that will only cover perils, or dangers, that are specifically listed on the policy. For example, if your policy does not list smoke, smoke damage will not be covered.

An unnamed perils policy, also known as all perils or all-risk policy, covers all perils except those that are explicitly excluded. For example, most policies exclude flood and earthquake damage. If your all-risk policy does not list fire as an exclusion, fire damage will be covered.

You can purchase additional policies to cover incidents that a basic HO-3 policy does not cover. Flood insurance and earthquake insurance can be added individually. If you need more liability coverage, you can also use an umbrella liability policy. Umbrella liability insurance covers liability costs after your other liability insurance reaches its limit. For example, if your personal liability insurance covers $1 million but you are sued for $1.5 million, an umbrella insurance policy will cover the remaining $500,000.

There are other types of home insurance policies that cover water damage, renters, condos, mobile homes and more. A comprehensive form (HO-5) covers the most perils.

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