Types of Homeowners Insurance

Homeowners insurance is not one-size-fits-all. The industry uses eight standard policy forms, from the bare-bones HO-1 to the HO-8 built for older homes, and the differences affect what gets paid after a loss. Knowing the types helps Illinois homeowners around Elgin and Kane County choose coverage that actually fits their home and budget.

How many types of homeowners insurance are there?

There are eight primary types of homeowners insurance, labeled HO-1 through HO-8. The right one depends on your property type, budget, and how much coverage you want. Most single-family homeowners land on HO-3.

Each form differs in what perils it covers and whether it pays actual cash value or replacement cost. Start with our home insurance page and the ultimate guide to homeowners insurance in Illinois.

What do HO-1 and HO-2 cover?

HO-1, the basic form, is very limited and rarely offered today. It covers your home and belongings at actual cash value against just 10 named perils such as fire, windstorm, theft, and vandalism.

HO-2, the broad form, is more common. It covers the dwelling structure at replacement cost while still paying personal property at actual cash value, against an expanded list of named perils. See additional coverages offered by homeowners insurance.

Why is HO-3 the most common policy?

HO-3, the special form, is the standard choice for most houses. It covers the dwelling on an open-perils basis, meaning everything is covered unless specifically excluded, while personal property is covered against named perils.

That broad structural protection is why lenders and homeowners favor it. Learn what it leaves out in what is not covered by homeowners insurance.

Which policies cover condos and renters?

HO-4 is renters insurance, covering a tenant's personal property and liability without insuring the building. HO-6 is condo insurance, covering the unit interior and personal property while the association master policy handles the building.

Both coordinate with another policy. See renters insurance and condo insurance coverage differences.

What about older or higher-value homes?

HO-8, the modified form, is built for older homes where rebuilding to original specs would cost far more than market value. It often pays on a repair-cost or actual cash value basis to keep coverage affordable. HO-5, the comprehensive form, offers the broadest open-perils protection for both dwelling and contents, popular for higher-value homes.

Older Illinois homes have unique needs. Read do older homes in Illinois need extra protection.

How do you choose the right homeowners policy?

Match the form to your situation: HO-3 or HO-5 for most houses, HO-6 for condos, HO-4 for renters, and HO-8 for older homes. Then confirm your dwelling limit reflects current rebuild costs.

An independent agent can compare forms and carriers for you. See whether it is time to update your policy or reach out via our contact page.

Work With Pro Insurance Group

Pro Insurance Group is an independent insurance broker based in Elgin, IL, serving clients across Illinois and 40+ states. Because we shop 20+ A-rated carriers, we put the whole market to work on your rate, and we re-shop every renewal so your premium never quietly creeps up. No agency fees, ever.

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Prefer to talk it through? Call 833-776-4671 or text "quoteme" to 312-878-9416.

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