Homeowner Insurance (HO-3)

HO3 is the most popular and common form of homeowners insurance. It insures owner-occupied properties.

It is considered an “all-risk” or open perils policy. Where named peril policies protect you from only the types of storms and disasters listed in the policy, an HO3 “all risk” policy works in exactly the opposite manner. In an HO3 policy, your home is covered for anything and everything unless it’s specifically listed as excluded from coverage.

Typical Exclusions in an HO3 Policy

The following list contains the commonly listed exclusions in an HO3 policy. Exclusions mean you are NOT covered for damage caused by any of the following perils unless you purchase additional coverage.

  • Enforcement of building codes and similar laws
  • Earthquakes
  • Flooding
  • Power failures
  • Neglect (meaning your failure to take reasonable steps to protect your property)
  • War
  • Nuclear hazard
  • Intentional acts
  • Freezing pipes and systems in vacant dwellings
  • Damage to foundations or pavements from ice and water weight
  • Theft from a dwelling under construction
  • Vandalism to vacant dwellings
  • Latent defects, corrosion, industrial smoke, pollution
  • Settling, wear, and tear
  • Pets, other animals, and pests
  • Weather conditions that aggravate other excluded causes of loss
  • Government and association actions
  • Defective construction, design, and maintenance

The most commonly overlooked type of coverage is flood insurance. Many people assume, incorrectly, that their basic homeowners insurance policy would cover water damage from flooding. In order to be covered for damage caused by flooding, the most common type of storm damage, you have to purchase a separate insurance policy that specifically covers flooding. The same rules apply for earthquakes and the other exclusions listed above.