What does an HO-5 insurance policy cover?

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HO-5 insurance provides comprehensive coverage for homeowners. Learn more about what it covers, how much it costs and how it differs from other policies. (Shutterstock)

Home insurance comes in many different forms that vary depending on the type of home you own and the level of coverage you want. You have eight different options for home insurance coverage, which range from HO-1 to HO-8. Of these, HO-5 is the most comprehensive.

Here’s an overview of what HO-5 insurance is, what it covers, and how much you can expect to pay for this type of home insurance policy.

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What is HO-5 Insurance?

An HO-5 policy covers the structure of your home, any detached structures (like a garage), and your personal property. It provides open or all perils protection, which means it covers damage caused by any peril (such as fire), unless your policy specifically excludes it. This differs from HO-3 insurance, the most common type of home insurancewhich provides all-risk coverage for your home, but not for your belongings.


Why do you need HO-5 insurance?

If you have a mortgage, your lender will usually require you to purchase home insurance. This will protect you and your lender if your home burns down, suffers hail damage or is swept away by a tornado – your policy will help cover the cost of repairing or rebuilding your home.

Even if you don’t have a mortgage, home insurance is essential because most of us can’t afford the out-of-pocket costs to completely replace our homes. After all, if a fire destroys your home, you will have to replace it and everything that was in it. This means buying everything from new clothes to furniture and electronics. Without insurance coverage, you are responsible for each of these replacement purchases.

With HO-5 insurance coverage, you get comprehensive protection for your home and personal property against virtually any risk. This means that your insurance cover will help you in many circumstances, unless the peril is specifically excluded in your policy. HO-5 insurance is especially useful for newer or more expensive homes, as it provides extensive coverage for valuables.

What does HO-5 insurance cover?

While other types of coverage (such as HO-1 and HO-2) only cover named perils (events specifically listed in your insurance policy), HO-5 insurance covers all possible perils, except unless they are explicitly excluded. An HO-5 policy provides coverage in six different areas:

  • The structure of your home (Guarantee A)
  • Other structures on your property (Cover B)
  • Your personal property (Guarantee C)
  • Additional living expenses if a peril renders your home uninhabitable (Guarantee D)
  • Third party liability if someone is injured on your property or if you cause damage to the property of others (Cover E)
  • Medical payments if you accidentally injure someone else (Coverage F)

Although each policy and insurer may differ in terms of exclusions, HO-5 insurance generally protects against damage from perils such as:

  • Fire
  • Smoke
  • Flash
  • Hail
  • Wind
  • Tornadoes
  • Weight of ice, snow or sleet
  • Aircraft damage
  • Blast
  • Flight

With Credible, you can compare home insurance quotes from multiple carriers in minutes.

What Does HO-5 Insurance Exclude?

With respect to HO-5 insurance, your policy covers all perils except those specifically excluded. For this reason, it is important to ask your insurer for exclusions before purchasing coverage and to read your policy documents very carefully.

However, home insurance policies have some common exclusions, such as floods, earthquakes, sewer backups, and acts of war. In addition, your home insurance does not cover damage due to negligence or normal wear and tear.


How much HO-5 insurance should you buy?

An HO-5 the police cover both your home and the property within, so you’ll want to purchase enough coverage to protect both categories. It’s a good idea to buy enough coverage to completely replace your home in case it gets destroyed. The same is true for your business. To determine the amount of cover you need, you will need to do the following:

  • Calculate the replacement cost of your home. You can estimate this number by multiplying the total square footage of your home by the local building costs per square foot. For a more accurate number, you can hire an appraiser to inspect your home.
  • Calculate the total value of personal property in your home. You can usually choose between actual cash value and replacement cost when covering your assets. Actual Cash Value will pay you for your assets based on their current value, taking into account depreciation. Replacement cost will reimburse you for a similar item at today’s price, regardless of age. To calculate the replacement cost of your personal possessions, create an inventory of everything you own. Write down the item and the price to replace it with something comparable today. Once you’ve completed your inventory, add the numbers together to get your total.

Buying too much coverage can mean wasting money on annual premiums. Buying too little coverage, however, could leave you holding the bag if your home and personal belongings are destroyed. Take your time to determine how much home insurance to buy.

How much does an average HO-5 font cost?

The cost of home insurance coverage can vary significantly depending on your location, the age and style of your home, and the level of coverage you choose, among other factors.

In the United States, the average cost of an HO-5 policy was $1,412 per year in 2019, or just under $118 per month, according to the National Association of Insurance Commissioners.

How is an HO-5 font different from other fonts?

Home insurance coverage comes in eight different forms, each offering its own coverage level. Here’s how they differ and what makes the HO-5 blanket unique.

How to get home insurance

If you are looking to take out home insurancewhether for an existing property or for a new home, you will need to follow these steps:

  1. Calculate the amount of coverage you need and decide which type of policy is right for you. Once you know the amount of coverage you need, you can decide which type of policy is right for you. When determining your home and personal property insurance needs, you can set your policy limits accordingly.
  2. Shop around and compare quotes. Spend some time getting quotes from multiple carriers to see who has the best rates and coverage for your situation. Many insurers will allow you to get a quote online, but you may also need to speak to an agent.
  3. Set your deductible and select optional coverages. Once you’ve chosen an insurer and a policy, it’s time to customize the coverage. This means selecting a franchise if you didn’t when getting quotes. Your deductible is the amount you will have to pay out of pocket following a covered event. You can also buy any optional coverage you want (like flood or earthquake protection).
  4. Buy the policy and pay your premium. After customizing the policy that suits you best, the final step is to purchase it. You can choose to pay your annual premium in advance or spread it over several instalments. Keep in mind that your mortgage lender may require you to pay premiums through an escrow account, incorporating them into your monthly mortgage payment.

Check out Credible for compare home insurance quotes from various vendors, all in one place.

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Justin D. O'Neill