The HO-3 has been the standard homeowners policy form for decades, and is adequate for most home owners’ personal insurance needs. For older homes, it’s still a good choice. But today, there’s something better, particularly for newer, well maintained homes. It’s known generically as the HO-5. The HO-5 is offered only on a limited basis – to newer homes, those with higher values, those meticulously maintained. However, its worth the time to find out if your home is eligible. Several common provisions that have had to be added to the HO-3 by specific endorsement are included automatically in the HO-5.
While the HO-3 covers your Contents on a “named perils” basis, the HO-5 covers contents on an “open perils” basis. Named perils means only those named perils will be covered.
An HO-3 policy includes 17 Perils.
While open perils policy form wording begins as follows: We insure against risks of direct loss to property, if that loss is a physical loss to the property; however we do not insure loss caused by risks associated with general home maintenance (wear and tear). Meaning, the HO-5 policy form is much broader coverage.
For more information comparing named and open perils, click here.