What do all those home insurance abbreviations mean?

Stephanie Taylor Christensen

If you're confused by the seemingly cryptic abbreviations associated with home insurance, don't be. Ranging from HO-1 to HO-8 (in most states), home insurance abbreviations generally refer to the level of coverage the insurance policy offers from perils, as well as the type of dwelling insured.

It is standard practice for a home insurance policy to exclude coverage for flood damage and earthquakes. You'll need to secure additional riders or policies for these types of coverage.

HO-1

An HO-1 policy offers coverage from fire, lightning, wind, hail, explosions, civil disturbance, aircraft or vehicle damage (not caused by the insured), smoke, vandalism, theft up to certain limits and volcanic eruption, according to the Insurance Information Institute. It is the lowest level of coverage offered by home insurance companies and is not offered in many states.

HO-2

HO-2 is another basic type of home insurance policy. There's also a variety of HO-2 designed for mobile homes. This type of home insurance policy covers your home against the 10 perils in an HO-1 policy. In addition, coverage includes damages from falling objects; damage from ice, snow and sleet; and damage from malfunctioning plumbing, heating and air conditioning systems, according to the New York State Insurance Department.

HO-3

The most popular policy type, HO-3 covers all the events that HO-1 and HO-2 policies cover and excludes only those perils that are named in the policy (like wars and earthquakes), according to the Insurance Information Institute.

HO-4

Most commonly known as renter's insurance, this policy insures a tenant's personal property, according to the New York State Insurance Department.

HO-5

Often called a "Comprehensive Form Policy," this type of coverage insures your dwelling as well as the contents in it, according to the New York State Insurance Department.

HO-6

Reserved for condo or co-op building owners, this provides the same peril coverage noted in HO-1 and HO-2, both for the parts of the building and the belongings owned by the policyholder, according to the Insurance Information Institute.

HO-8:

Similar to an HO-1 policy, this is a popular coverage for older homes, according to the New York State Insurance Department. It reimburses for damage based on a home's actual cash value (what it's worth on the market), rather than its replacement value (the cost of rebuilding it).

Exceptions

Most states are streamlined in their abbreviations. Texas, however, is an exception. It uses a standardized letter system ranging from HO-A to HO-C. HO-A represents an extremely limited type of home insurance policy, while HO-C is the broadest, according to the Texas Department of Insurance.

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