what is the differences between H02, H03, & H05 policies?

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Asked March 12, 2019

1 Answer

HO2, HO3, and HO5 policies can go by different names but they are nationally standardized forms of homeowners insurance policies including in Missouri where you live. An HO2 policy is the most limited, HO3 policies are broader, and HO5 policies have the most coverage.

An HO2 policy is one of the basic versions of a homeowner's insurance policy. It only covers the named perils that are listed on the policy. This includes among other named perils freezing, falling objects, fire/lightning, windstorm/hail, vandalism, smoke, volcanic eruption, and personal liability. You can buy this type of policy either on an actual cash value basis or with replacement cost coverage.

If the policy is actual cash value than it only covers the depreciated value of what you lost in a named peril event. If you have a replacement cost policy it covers what it costs to replace your property with new property equivalent to what was lost.

An HO3 policy is much more comprehensive. It covers your home from any peril unless it is specifically excluded by the policy. The exclusions include among others flooding, earthquake, war, nuclear hazard, intentional acts by the homeowner, water damage, and earth movement. An HO3 policy covers your contents by a named perils basis only.

An HO5 policy includes all the coverages of an HO3 policy. It covers both the structure and your contents from all perils unless excluded. Like all homeowners policies, earthquake and flooding are excluded even on an HO5 policy. A damaged home and the contents are covered at replacement cost.

If you do want coverage for earthquake or flooding those may be available to you as separate insurance policies. Flood coverage is a federally administered program where the costs are determined by how prone your home's area is to flooding.

Answered March 14, 2019 by HelloSure

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