HO8 vs HO3 Home Insurance Policy // What’s The Difference!

Oct 15, 2019 (0) comment

ho8 vs ho3

Making sure you get the best home insurance policy can be a bit overwhelming.

And figuring out the how the different types of home insurance work, like HO8 vs HO3, can get down right confusing.

But, it doesn't have to be:

There are only a few types of policies that are actually for your home and learning how they work isn't hard.

ho8 vs ho3

In this post today, I will go over the differences between HO8 and HO3 homeowners insurancehow they work and how to choose between the two.

​In This Article



What's An HO8 & HO3 Insurance Policy

Before we can talk about the differences between an HO8 and an HO3 policy, we first must understand how each plan works individually.

What is An HO8 Homeowners Policy 

An HO-8 policy also goes by the name Older Form Home and was created to cover older homes on a named peril basis. 

The 10 perils the HO8 Home Insurance Policy will protect your home and belongings from are:

  • Fire or Lightning
  • Windstorm or Hail
  • Explosion
  • Riot or Civil Commotion
  • Aircraft
  • Vehicles(unless caused by the insured)
  • Smoke
  • Vandalism or Malicious Mischief
  • Theft (limit of liability on HO8 is usually $1,000)
  • Volcanic Eruption

This type of coverage can usually be found on historic homes and registered landmarks or homes that are:  

  • Over 40 Years Old
  • Don’t Meet All Of The Structural And Cosmetic Update Requirements

HO8 Home Insurance Will Only Insure At Market Value

Because this policy is normally used to insure homes that would be very difficult to replace if they were destroyed; these policies only cover homes at the market or actual cash value.

An Actual cash value policy means that you won't be covered for what it costs to replace the home; you will only be covered for what the current value of the home is.

Certain Perils That Might Not Be Covered

While the HO8 policy does cover you for a list of the most normal perils; there are some perils that you won't be covered for in your policy and they are: 

Water Damage - no water damage of any kind is usually included in a basic HO8 home insurance policy. You might be able to add coverage to your policy for an additional premium.

Falling Objects - There isn't any coverage for falling objects unless you can prove the objects fell on your home as a due to one of the ten covered perils that are listed in the policy.

Now:

If you have an older home, but would prefer an HO3 Policy you’ll typically need to make updates to the: 

  • HVAC
  • electrical
  • plumbing
  • And Roof

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
  • Vandalism or Malicious Mischief
  • 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.

Simply Insurance is the fastest way to compare home insurance online.

​"Simply Insurance... focuses on consumer-facing insurance products and instant online insurance quotes"

- USA Weekly

HO8 vs HO3 Homeowners Insurance Policy

This older home form policy (HO8) is almost exactly the same as the HO-3 policy but with a few adaptations for older homes. 

And while the HO3 policy is a mixture of a named peril and open peril policy, HO8 policies tend to be fully named peril policies. 

The HO3 policy also covers a few more perils than the HO8 policy and has the ability to cover you with replacement cost claims coverage at an additional cost. 

Here is what it looks like: 

Dwelling Coverage (coverage for your physical house, inside and out) 


HO3


HO8


Open Perils


Named Perils

Personal Property Coverage (coverage for your stuff)


HO3


HO8


Named Perils


Named Perils

Claims Reimbursement


HO3


HO8


Actual Cash Value


Actual Cash Value

Should I Get An HO-8 OR HO-3 Policy? 

Which option you pick will depend on the age of your home, it's current condition, and the location of your home. 

If you don't mind doing a few updates to your older home then an HO3 policy will be your pest option because it will cover more perils. 

If you have a much older home and want to keep your premiums reasonable then an HO8 policy would probably be best. 

So:

My recommendation is that you should go with the policy that will give you the best price for Maximum coverage.

In General, Who's It For? 

HO3 policies are available to all home types (it’s at the insurance company’s discretion whether to accept your application for insurance).

HO8 policies are going to be for a much older home.

Simply Insurance is the fastest way to buy homeowners insurance online.

​"Simply Insurance... focuses on consumer-facing insurance products and instant online insurance quotes"

- USA Weekly

Who Has The Best Home Insurance Policy?

We have found the best home insurance to come from Hippo, you can check out or quick review below.

hippo insurance logo

About ​Hippo Home Insurance

​Hippo is the newest entrant into the​ home insurance world but is backed by ​TOPA Insurance company.

​As of today TOPA has ​ an A- (​Excellent) rating with A. M. Best.

​Hippo believes that great ​homeowners insurance should be affordable, smart, convenient,​ and fast.

​Hippo wants to make sure that you are able to get a homeowners insurance policy that covers you for the most relevant things today.

Product Features

  • ​​Coverage For Your Home Office
  • ​​​​Free Water leak Sensor For Home
  • ​​Condo Insurance Available
  • ​Quotes In 60 Seconds
  • ​Mortgage Payment Protection
  • ​A Simple, 100% Online Application & E Signature Process
  • Available In: AL, AZ, CA, GA, IL, IN, MD, MN, MO, MS, NM, NV, OH, PA, SC, TN, TX, UT, WI  

​​A Free (Roost Water Leak Sensor) With Every Policy

With every policy Hippo offers a free Roost water leak sensor that has a value of $50.00. ​ According to Roost, you can outsmart water with their smart water leak and freeze detector. The way it works is that you place it anywhere the potential for flooding or leaking exists and ​if it senses water it will send an alert to your smart phone.

Simply Insurance Thinks

​Hippo has come out of the gates swinging at its competitors with on average 25% lower premiums.  They also have a much faster application and approval process which doesn't require an agent to complete.  Hippo is the best answer ​if you need fast quotes and fast coverage.

​Want to learn more?  Check out our full ​Hippo Insurance Review.

​Take Action

There is no reason to go without homeowners insurance, in fact, over 70% of people don't even shop for their homeowners insurance. 

They just take what's offered by a real estate agent or mortgage broker.

Now that you understand the differences between and HO8 and HO3 policy it's time to take action. 

Remember, your policy should be unique to your specific situation and regardless of which policy type you choose, it needs to make sense for your home and personal property.

Click here to get some quick quotes the process started today.


Sa El is the Co-Founder & CEO of Simply Insurance. He is a Licensed Life and Health Insurance Agent with over 11 years of experience in the industry. He is an Entrepreneur, Insurance Educator and Field Underwriter. Sa is on a Journey to get 1 Million Families insured.

All posts by Mark Mathon

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