Homeowners policy (HO)
Also known as: ho policy, homeowners insurance
A homeowners policy is a package policy that combines property coverage on a residence and its contents with personal liability coverage in a single contract. Standard HO forms are numbered — HO-3 for owner-occupied homes, HO-4 for renters, HO-6 for condominium unit owners.
A homeowners policy is a package policy: it bundles first-party property protection and third-party liability protection that would otherwise require separate contracts. Insurers write it on standardized forms so that coverages are consistent from company to company, which is why exam questions can refer to a form number and expect you to know what it covers.
Every homeowners form is organized into two sections. Section I covers property: Coverage A on the dwelling, Coverage B on other structures such as a detached garage or fence, Coverage C on personal property, and Coverage D for loss of use, which pays additional living expenses while the home is uninhabitable. Section II covers liability: Coverage E for personal liability arising from bodily injury or property damage the insured is legally responsible for, and Coverage F for medical payments to others, which pays reasonable medical expenses for guests injured on the premises regardless of fault.
The forms differ mainly in who is being insured and how broadly perils are covered. HO-2 is a broad form insuring against named perils. HO-3 — the most widely written form — covers the dwelling on an open-peril basis while insuring personal property against named perils. HO-4 covers a tenant's personal property and liability without insuring the building. HO-5 extends open-peril coverage to personal property as well, HO-6 is written for condominium unit owners, and HO-8 is a modified form for older homes where replacement cost far exceeds market value. Certain perils are excluded from all forms, most notably flood, which must be insured separately through the National Flood Insurance Program or a private flood policy.
Homeowners forms are heavily tested on the Property, Property and Casualty, and Personal Lines licensing exams. Focus on matching each form number to its intended insured, distinguishing named-peril from open-peril coverage, identifying which coverage letter applies to a given loss, and remembering the standard exclusions such as flood and earth movement.
Key takeaways
- A homeowners policy packages property coverage and personal liability coverage into one contract.
- Section I holds Coverages A through D (dwelling, other structures, personal property, loss of use); Section II holds Coverage E (personal liability) and Coverage F (medical payments to others).
- HO-3 is the standard owner-occupied form, HO-4 covers renters, and HO-6 covers condominium unit owners.
- Flood is excluded from every homeowners form and requires separate flood insurance.