What Is an HO-3 Policy in Homeowners Insurance?
The HO-3 is the most common homeowners insurance policy in the United States — and the one most Texas homeowners carry without fully understanding what it covers and where it stops. Here is the complete breakdown.
The Basic Definition
An HO-3 is a form number created by the Insurance Services Office that defines what a standard homeowners policy covers — the HO stands for homeowners, and the 3 designates this specific form, the most widely used of the eight homeowners forms available. When people say “homeowners insurance,” they almost always mean an HO-3 policy, and roughly 80% of Texas single-family homeowners carry one. The key feature that makes the HO-3 the industry standard is its split coverage approach — treating the structure and personal property under two different coverage philosophies.
Open Perils for Your Dwelling: The Key Advantage
The most important feature of an HO-3 is how it covers your home’s structure. It covers the dwelling on an open-perils basis — any cause of loss not specifically excluded is covered. This means the burden is on the insurer to prove a specific exclusion applies — not on the homeowner to prove a specific peril caused the damage. Fire, wind, hail, vandalism, falling objects, and dozens of other perils are automatically covered without needing to be listed. The only way damage to your structure is not covered is if the policy specifically excludes it — and the most significant exclusions in Texas are flood, earthquake, and wear and tear.
Named Perils for Personal Property: The Important Limitation
While your dwelling enjoys broad open-peril protection, your belongings inside the home receive narrower coverage. Personal property under an HO-3 is covered on a named-perils basis, meaning only the specific events listed in the policy apply to belongings. The standard list includes 16 named perils — fire, lightning, windstorm, hail, theft, vandalism, and others — but anything not on the list is excluded for personal property even if it would be covered for the structure. This split is the most common source of coverage surprises at Texas claim time.
The Six Core Coverages in an HO-3
A standard Texas HO-3 policy includes Coverage A for the dwelling structure, Coverage B for other structures like garages and fences, Coverage C for personal property, Coverage D for additional living expenses while displaced, Coverage E for personal liability, and Coverage F for medical payments to others. Each section has its own limits, and Texas averages $3,500 to $4,500 per year for a standard HO-3 on a $300,000 home.
Texas-Specific Considerations
Texas uses some unique policy forms alongside the national HO-3 standard. The HO-A is the most basic Texas form — covering only named perils at actual cash value. The HO-B is an older Texas broad form. The HO-3 is the national standard sweet spot for most Texas homeowners, while the HO-5 is the premium upgrade offering open-peril protection on both the dwelling and personal property. Contact the Texas Department of Insurance to confirm which form your current policy uses.
