93% of American homeowners have some form of home insurance, so you should too.

Before you jump headfirst into your first home insurance policy, it’s important to know what types of home insurance are out there. In total, there are 6 types; they are HO2, HO3, HO4, HO5, HO-6, HO7, and HO8 policies.

Today, we are going to go over a few of the main types to give you a better idea of what type of home insurance policy may best suit your needs. This can be an overwhelming thing to think about for a homeowner but keep reading and we’ll make it as simple as possible.

Dwelling Fire policies

Dwelling Fire policies are the most basic type of homeowner insurance. They cover you against very specific damages, like fire, lightning, explosion, a car crashing into your home, and even volcanic eruptions.

Due to the limits of this type of insurance, it’s not a very popular policy anymore. It’s extremely affordable, but you’ll be out a lot of money if anything outside the policy occurs.


HO-2 insurance goes a bit further than Dwelling Fire. It covers damage from the weight of snow and ice, frozen plumbing or HVAC, falling objects, and accidental overflow of water, among other things.

It also includes dwelling coverage, personal belonging coverage, medical payments to others, and personal liability. It should be noted that your belongings are only covered for a cash value after depreciation.


Here, we have the most common type of homeowner insurance. Instead of covering specific damages, as the previous two do, it covers everything except for specific exclusions.

An HO-3 policy will pay to repair or replace your home under your policy limits. However, it’ll be important to review the exclusions with your insurance provider.

In addition to the HO-3, many carriers also offer HE-7 (along with HE-7 with 20 and 21 extensions).


HO-5 is also known as a comprehensive policy, which is the most coverage you can get as a homeowner. It covers your home and all your belongings in every circumstance outside of the specified exclusions, which are the same as the HO-3 policy.

What sets the HO-5 policy apart from the HO-3 policy is that it pays out for replacement costs instead of cash value accounting for depreciation. You’ll also get liability, medical, and living expense coverage.

HO-4, HO-6 and HO-8

The rest of the policies don’t necessarily apply to traditional homeownership. HO-4 is renter’s insurance, while HO-6 covers condos and co-ops.

HO-8 policies are reserved for homes that are over 40 years old because the cost of rebuilding is more than the value of the home.

Get the Right Types of Home Insurance

Now that you understand the different types of home insurance, it’s time to find good home insurance companies to help you figure out which is best for your situation. If you are in North Carolina, the Tom Needham Insurance Agency is your best bet.

We pride ourselves on being a customer-first insurance company. Contact us today and let us help you protect your home and belongings with the right type of home insurance.