HO3 vs HO6 Home Insurance Policy | What’s The Difference In 2022?

What’s An HO3 & HO6 Insurance Policy

Before we can talk about the differences between an HO3 and an HO6 policy, we first must understand how each plan works individually.

What is An HO6 Homeowners Policy

An HO6 policy is just the technical name for Condo Insurance and is going to be for a condo owner.

This type of policy traditionally will only cover your personal property, personal liability, your walls, floors, and your ceilings when you live in a condo.

However, just like renters insurance, it doesn’t cover the actual structure of the building nor will your homeowner’s associations master insurance policy cover your personal items.

An HO6 policy is a named perils policy for both your personal items and your property, which means it will only cover your items if they are damaged by the set of specific perils listed in the policy.

What is An HO3 Homeowners Policy

The most common type of homeowners insurance policy you can find will be the HO-3, also known as a Special Form policy.

Since it has a broad range of coverage and some of the most affordable premiums, it has become the most offered type of home insurance policy.

The HO-3 policy is actually a combination of an “open perils” policy and a “named perils” policy.

It’s considered a combination because it will cover your Dwelling (the physical house, and attached structures) on an open perils basis and your personal property (your things) on a named peril basis only.

The HO3 policy also only pays out claims on an Actual Cash Value basis.

We will cover exactly what the different types of perils mean, as well as the kind of claims payout options a little further down in this post.

This policy will also cover Other structures, Personal Liability, and Medical payments to others.

Open Peril Policy

An open peril policy is a complicated way of saying that you are covered for any peril as long as it is NOT listed as being excluded in your policy.

For example:

If your policy lists exclusions for ice, lightning, and floods, as long as the damage caused to your property wasn’t from ice, lighting, or floods, you would be covered.

Named Peril Policy

A Named Peril policy is only going to cover you for perils that are specifically named in your policy documents.

This means, if your homeowner’s insurance policy lists “snow” as a type of covered peril, but not “hail,” then hail damage would not be covered in a named peril policy.

Below is a list of named perils that limit your personal property coverage on an HO3 policy

Remember, when it comes to your personal property if it is damaged by anything other than the below items; it won’t be covered by your home insurance policy:

  • Theft
  • Fire Or Lightning
  • Explosion
  • Smoke
  • Freezing
  • Vehicles
  • Falling Objects
  • Volcanic Eruption
  • Windstorm Or Hail
  • Riot Or Civil Commotion
  • Damage Caused By Aircraft
  • Damage Due To Weight Of Ice, Snow, Or Sleet
  • Sudden & Accidental Tearing Apart, Cracking, Burning, Or Bulging
  • Sudden & Accidental Damage From Artificially Generated Electric Current
  • Accidental Discharge Or Overflow Of Water From Plumbing, Air Conditioning, Etc.

HO3 vs HO6 Homeowners Policy

The largest difference between the two policies is going to be that an HO3 policy is specifically for a house and an HO6 policy was created for a condo.

And while the HO3 policy is a mixture of a named peril and open peril policy, HO6 policies tend to be fully named peril policies.

Of course an HO3 policy will also cover the actual structure of your home as well as other structures on the property.

An HO6 policy will not cover any of the building items outside of your condo and only usually covers everything up to the walls of your unit.

You also have the option (depending on the company) to get the Replacement cost value of your personal items with an HO6 policy.

The HO3 policy will usually only return you the Actual Cash Value of the items you have lost and covers your personal property on a named peril basis.