Man watching relaxed trough window of his home
HO3 home insurance or special form homeowner policy – the most comprehensive and popular type. Covers most risks except namely excluded perils.

This is the most popular form of insurance with many homeowners. It is often referred to as ‘special form’ insurance. Many people buy this HO-3 form because it will cover everything except a certain list of exclusions. So where the other two forms of insurance have a fairly short list of things it will actually, and HO-3 policy only has a list of things it will not cover. This means that the policy includes personal liability. If you inure someone in a sporting accident and they try to recover money from you for their injuries, your HO-3 has your covered. An HO-3 covers your detached structures. Say your pool house that you just built one year ago gets hit by the rash of vandalism going around and you have to replace your custom siding that now has crude language written all over it. If you think your claim is above and beyond your deductible and it’s worth it to file, use your HO-3 policy.

Another reason this is one of the most popular forms of insurance is because it has a broad coverage for contents with an option to purchase more and a special coverage for your buildings. Special coverage? What does that mean?

So far, the other two forms of insurance have only offered either a basic or broad coverage. Basic coverage is very limited and will rarely cover your claim unless it’s specifically listed in the policy. This isn’t a good amount of protection. Broad form is better than basic. It covers more forms of loss which raises your chances of having your claim covered. The best option though, when possible, is special coverage. This means that pretty much anything that damages your house, detached structures, or content will be covered as long as it is not on the list of exclusions.

HO3-Home Insurance Coverage and Exclusions

This will put a homeowner’s mind at ease after hearing about horror stories where people thought they were receiving a good deal on their insurance when in fact, they had little to no coverage. The great part is that you can extend that special coverage to your personal belonging as well for an extra fee. They will start out under broad coverage, which are the 16 cause of loss option listed for an HO-2 policy. If you have expensive art or very valuable furniture, making the extra investment to protect your belongings will be worth it.

For a homeowner, the one part that deserves extra attention is the exclusion list. You will want to make sure that you know this inside and out so that you can take the extra steps necessary to protect yourself. For a standard HO-3 policy, the exclusions are listed as follows:

  • ordinance or law – If your house needs work to bring it up to code, you will not be covered.
  • Earth movement – If an earthquake damages your house, you aren’t covered.
  • water damage – Floods and sewer back-ups are not included in your policy coverage.
  • power failure – If you lose your computer due to a power failure, you cannot claim your loss.
  • Neglect – If your roof caves in despite multiple notices to repair it, it’s not covered.
  • War – If a war breaks out in the U.S. and your house gets bombed, don’t call your insurance company.
  • Nuclear hazard – If your house is damaged as a result of a nuclear bomb, you have bigger problems to worry about than filing an insurance claim anyway.
  • Intentional loss – If you try to set your house on fire to get insurance money, they won’t give you any.
  • Governmental action – If the government causes any destruction or tries to seize your property, you’re on your own
  • Loss to Property – If you decide that installing a hot tub on your own in your sunroom is a good idea and then have extensive water and electrical damage, don’t expect any pity from the insurance company.

When you know what your policy exclusions are, you can start taking the necessary steps to protect yourself from them. If you know you live in an earthquake prone area, start researching different forms of earthquake insurance. Everyone should have flood insurance because it will cover you if your pipes burst and create a pond in your basement or a hurricane leave a 3 foot water mark on your walls. Once you know where you are vulnerable, you can begin to build up other resources. For everything else, you have your HO-3 policy.