When purchasing homeowners insurance, consumers should be aware that there are different types. The least expensive, HO-2, covers only named perils. If a peril is not listed, insurance does not cover it. HO-3 includes “open perils protection,” which means that it covers all direct physical losses to the home and lists specific exclusions. While all homeowners insurance excludes certain types of damage (earth movement, neglect, war, intentional losses, etc.), coverage for some of these specific perils may be added separately to the policy. HO-3 is generally recommended as the minimum level of homeowners insurance. There is also HO-5, which covers open perils and includes a rider (HO-15) that permits open perils coverage on personal property.
NOTE: HO-4 insurance is renters and tenants insurance, and HO-6 is condominium insurance.