What homeowners insurance covers (HO-3)
A standard HO-3 homeowners policy covers six things: your dwelling, other structures (detached garage, fence, shed), personal property, loss of use (extra living costs if you can't stay home), personal liability, and medical payments to guests. The home itself is covered on an open-perils basis (everything except named exclusions); your belongings on a named-peril basis. The big exclusions are flood and earthquake, which need separate policies.
Source: Insurance Information Institute (III) — Facts + Statistics: Homeowners insurance. Data as of June 2026.
The six HO-3 coverages
| Coverage | What it pays for | Typical limit |
|---|---|---|
| Coverage A — Dwelling | Repair/rebuild the home's structure and attached structures | Set to full replacement cost |
| Coverage B — Other structures | Detached garage, shed, fence, driveway | ~10% of dwelling |
| Coverage C — Personal property | Belongings: furniture, clothing, electronics | ~50–70% of dwelling |
| Coverage D — Loss of use | Hotel, meals, extra costs while displaced | ~20–30% of dwelling |
| Coverage E — Personal liability | Injury/damage you're legally responsible for | $100k–$500k typical |
| Coverage F — Medical payments | Guest medical bills regardless of fault | $1,000–$5,000 typical |
What HO-3 does not cover
- Flood — needs a separate NFIP or private flood policy.
- Earthquake / earth movement — separate endorsement or policy.
- Wear and tear, neglect, pests, mold — maintenance issues, not sudden accidents.
- Sewer/drain backup — often an add-on endorsement.
- High-value items (jewelry, art) above sub-limits — scheduled separately.
In hurricane- and hail-prone states, wind/hail or named-storm losses can carry a separate percentage deductible (e.g. 2% of dwelling coverage) rather than a flat dollar amount.
Open perils vs named perils
HO-3 insures the structure against all perils except those specifically excluded (open perils), but your personal property only against a list of named perils (fire, theft, wind, etc.). An HO-5 upgrades personal property to open perils too, which is why it costs more.
Frequently asked questions
What does an HO-3 policy cover?
An HO-3 covers six things: the dwelling (your home's structure), other structures (detached garage, fence, shed), personal property, loss of use (extra living costs if you're displaced), personal liability, and medical payments to others. The dwelling and other structures are covered on an open-perils basis; personal property is covered for named perils.
What does homeowners insurance NOT cover?
Standard HO-3 policies exclude flood and earthquake (both need separate coverage), plus normal wear and tear, neglect, pest and mold damage, and earth movement. In high-risk wind areas, hurricane or wind/hail may carry a separate percentage deductible.
Is HO-3 the most common homeowners policy?
Yes. The HO-3 "special form" is the standard owner-occupied homeowners policy, covering roughly 78.99% of insured owner-occupied exposures in the NAIC data. HO-5 is a broader (and pricier) version; HO-6 is for condos.
Related
General information only. Coverage details, limits and exclusions vary by insurer and state. Read your own policy and verify with your insurer and state insurance department.
Last updated: 2026-06-20