Choosing the right homeowners insurance policy form determines whether your dwelling and personal belongings are covered against unexpected perils or excluded under named-peril restrictions.

1. The HO-3 Special Form (Industry Standard)

The HO-3 policy provides 'open perils' coverage for the dwelling structure (covering all risks of physical loss except those explicitly excluded, such as flood or earth movement) and 'named perils' coverage for personal property (covering only 16 specific perils such as fire, lightning, smoke, and theft).

2. The HO-5 Comprehensive Form (Premium Protection)

The HO-5 policy offers 'open perils' coverage for both the dwelling structure AND personal property. Under an HO-5 policy, if personal property is damaged or lost, the insurer must prove the peril is explicitly excluded to deny the claim, providing broader protection for high-value personal assets.

3. Actual Cash Value (ACV) vs. Extended Replacement Cost

Actual Cash Value (ACV) deducts depreciation from claim payouts. In contrast, Guaranteed or Extended Replacement Cost (typically 125% to 150% of policy limits) pays the full cost to rebuild your home with modern materials at current labor rates, protecting against post-disaster inflation spikes.