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Explanation of the differences between an HO-3 and HO-8 home insurance coverage

HO-3 Versus HO-8 Home Insurance

Understanding the differences between homeowners insurance policies will help you choose which one is the best for your home.

HO-3 Home Insurance

An HO-3 home insurance policy is one of the most common forms in the home insurance market. This policy provides protection for your property, yourself, and the people in the home. It is the best choice because unlike its predecessors HO-1 and HO-2, it features extensive coverage for perils that can cause damage to your home.

HO-3 is also known as the standard home insurance policy. The broad range of coverage provides protection against 16 common perils, as well as, a long list of other perils except those that are specifically excluded such as flood, earthquake, mudslide and landslide, sinkholes, and nuclear accidents.

An HO-3 will provide protection for six general items which include:

  • Dwelling – This coverage protects the structure of your home including attached fixtures such as plumbing, heating, and HVAC.
  • Other Structures –  This type of coverage provides protection for structures that are not attached to your home. For example, sheds, detached garage, fences, driveway, retaining wall, and similar structures.
  • Personal Property – Provides protection for the contents inside your home, this includes items like appliances, clothes, furniture, and every item that is inside your home.
  • Liability – This coverage provides protection against lawsuits that arise due to the accidents that occur within your property. For example, if some slip due to a wet walkway in your home.
  • Loss of Use – This type of coverage will reimburse you in case you need to stay in another place due to repairs or rebuilding of your home. Other expenses like food, fuel, and clothing will also be reimbursed up to your policy’s limits.
  • Medical Payments To Others – This coverage will provide protection in case guests or workers becomes injured while within your property. It will reimburse for expenses like ambulance rides, x-ray, laboratory, dental work, and hospital bills.

HO-8 Home Insurance

The HO-8 is another very common insurance policy that homeowners can purchase. This insurance policy is best for homes that are older than 40 years old. Unfortunately, HO-8 does not include some updated requirements that are found in a standard home insurance policy (HO-3). For example, update to the coverage for:

For homes that are under HO-8, most insurance companies will require proof of full updates which will be approved through a 4-Point Inspection. This means numerous parts of the home will be checked including electrical wirings, HVAC, and portable heating will not be allowed.

Differences Between HO-3 and HO-8

These two types of policies have two major differences:

1. Common Construction (HO8) vs Replacement Cost (HO3)

Replacement cost is one of the best ways to ensure that in case your home is faced with a disaster you get a new home (or repair your home) to as close as it was to your living conditions before it was damaged. Common construction coverage for HO-8 will only guarantee that your insurance company will replace any damage as long as it matches the basic features of your damaged home, such as the square footage. This is why this type of insurance is used for old homes because it may not be realistic to find old construction materials.

2. Named Peril (HO8) vs Open Peril (HO3)

Open peril means your home can be protected for everything except due to specific causes, still, you may purchase this coverage for an additional cost to your premium.

  • Flooding
  • Mold
  • Pests
  • Sewage Backup
  • Earthquake
  • Lateral Lines Coverage

Named Peril, on the other hand, will only cover for what is actually listed in the policy. Typically, the 10 most common perils are covered under the HO-8.

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