HO3 Home Insurance: What's Covered, What's Not

What Makes an HO3 Special?

• Dwelling = Open Peril: Everything is covered unless specifically excluded (e.g. flood, earthquake, wear & tear).
• Personal Property = Named Perils: Only listed risks are covered (fire, theft, water damage, etc.).
• Burden of Proof Reversal: For your home, the insurer must prove an exclusion applies.

Key Coverages at a Glance

🏠Coverage A: Dwelling

• Covers your home structure (walls, roof, built-ins).
• Insure for replacement cost, not market value.
• Review coverage yearly—construction inflation can leave you underinsured.
• Not covered: Floods, earthquakes, maintenance issues.

🏚Coverage B: Other Structures

• Detached garage, shed, fence, pool, etc.
• Default limit: 10% of dwelling coverage (can be increased).
• Rental spaces may not be covered without a special endorsement.

📦Coverage C: Personal Property

• Furniture, electronics, clothing, etc.
• Covered perils: Fire, theft, water damage, vandalism, more.
• Limit: 50-70% of dwelling value.
• Watch for sub-limits on items like:
  • Jewelry: $1,000–$2,500
  • Cash: $200–$500
  • Business property: $2,500
• Upgrade to replacement cost coverage for better payouts.
• Schedule high-value items like engagement rings or collectibles.

🏨Coverage D: Loss of Use

• Pays for temporary living if your home becomes uninhabitable.
• Limit: 20–30% of dwelling value.
• Covers hotels, extra food, pet boarding—not your mortgage.

⚖️Coverage E: Personal Liability

• Covers injury or damage you cause to others.
• Limit: $100K–$500K (recommend $300K+ or add an umbrella policy).
• Think dog bites, pool accidents, slip-and-falls.

🩹Coverage F: Medical Payments to Others

• Pays minor medical bills for guests, no matter who's at fault.
• Limit: $1K–$5K.
• Example: Someone trips on your porch—this pays without needing a lawsuit.

Built-in Extras Most Policies Include

• Debris removal
• Temporary repairs
• Fire department service fees
• Stolen credit card protection
• Loss assessments (for HOA)

9 Common Gaps to Watch For

Understanding Deductibles

• Standard Deductible: $500–$5,000. Higher = lower premium.
• Hurricane/Wind Deductibles: 1–5% of dwelling limit (common near coast).
• Choose a deductible you can comfortably afford if disaster strikes.

Replacement Cost ≠ Market Value

• Insure for rebuild cost, not sale price.
• Market value includes land—land doesn't need insurance.

Questions to Ask Your Agent

Final Word

An HO3 policy is solid protection—but not complete. Review your coverage yearly, add key endorsements, and make sure you're insuring what matters most.

This guide provides general information about HO3 homeowner's policies. Specific coverage, exclusions, and limits vary by insurance carrier and state. Always review your actual policy documents or contact us for personalized advice.