Key takeaways
- An HO3 is the most common homeowner's policy in the U.S.: the dwelling is open peril (covered unless excluded), and personal property is named peril (only listed risks).
- Insure Coverage A for rebuild cost, not market value. Market value includes land, and land does not need insurance.
- Default pieces include other structures (often 10% of dwelling), personal property (often 50-70%), loss of use, liability, and medical payments to guests.
- Flood, earthquake, sewer backup, and many high-value items are common gaps. Those usually need a separate policy or an endorsement.
- Coastal policies often carry a separate hurricane or wind deductible of 1-5% of the dwelling limit, on top of the standard deductible.
What Makes an HO3 Special?
- Dwelling = Open Peril: Everything is covered unless specifically excluded (e.g. flood, earthquake, wear & tear).
- Personal Property = Named Perils: Only listed risks are covered (fire, theft, water damage, etc.).
- Burden of Proof Reversal: For your home, the insurer must prove an exclusion applies.
Key Coverages at a Glance
Coverage A: Dwelling
- Covers your home structure (walls, roof, built-ins).
- Insure for replacement cost, not market value.
- Review coverage yearly. Construction inflation can leave you underinsured.
- Not covered: Floods, earthquakes, maintenance issues.
Coverage B: Other Structures
- Detached garage, shed, fence, pool, etc.
- Default limit: 10% of dwelling coverage (can be increased).
- Rental spaces may not be covered without a special endorsement.
Coverage C: Personal Property
- Furniture, electronics, clothing, etc.
- Covered perils: Fire, theft, water damage, vandalism, more.
- Limit: 50-70% of dwelling value.
- Watch for sub-limits on items like: Jewelry ($1,000–$2,500), Cash ($200–$500), Business property ($2,500).
- Upgrade to replacement cost coverage for better payouts.
- Schedule high-value items like engagement rings or collectibles.
Coverage D: Loss of Use
- Pays for temporary living if your home becomes uninhabitable.
- Limit: 20–30% of dwelling value.
- Covers hotels, extra food, pet boarding, not your mortgage.
Coverage E: Personal Liability
- Covers injury or damage you cause to others.
- Limit: $100K–$500K (recommend $300K+ or add an umbrella policy).
- Think dog bites, pool accidents, slip-and-falls.
Coverage F: Medical Payments to Others
- Pays minor medical bills for guests, no matter who's at fault.
- Limit: $1K–$5K.
- Example: Someone trips on your porch. This pays without needing a lawsuit.
Built-in Extras Most Policies Include
- Debris removal
- Temporary repairs
- Fire department service fees
- Stolen credit card protection
- Loss assessments (for HOA)
9 Common Gaps to Watch For
- Flood Damage – Get NFIP or private flood insurance.
- Earthquake Coverage – Needed in seismic zones.
- Water Backup – Add this endorsement to cover sewer backups.
- Service Line – Covers damaged utility lines under your yard.
- Inflation Guard – Adjusts Coverage A automatically.
- Personal Property Replacement Cost – Upgrade from ACV.
- Ordinance or Law – Pays for code-required upgrades after damage.
- Valuable Items – Schedule high-value items separately.
- Home Business Coverage – Add if you operate a business from home.
Understanding Deductibles
- Standard Deductible: $500–$5,000. Higher = lower premium.
- Hurricane/Wind Deductibles: 1–5% of dwelling limit (common near coast).
- Choose a deductible you can comfortably afford if disaster strikes.
Replacement Cost ≠ Market Value
Insure for rebuild cost, not sale price. Market value includes land. Land doesn't need insurance.
Example: Home market value: $450K. Land = $100K. Rebuild cost = $375K. Proper Coverage A = $375K+.
Questions to Ask Your Agent
- Am I insured for full replacement cost?
- Is personal property set to replacement cost?
- What sub-limits apply to jewelry and valuables?
- Do I need flood, earthquake, or water backup?
- Should I increase liability limits or add an umbrella?
- How is inflation accounted for in my policy?
Final Word
An HO3 policy is solid protection, but not complete. Review your coverage yearly, add key endorsements, and make sure you're insuring what matters most. For the Jacksonville coastal form, start with homeowners insurance in Jacksonville.
Common questions
What is an HO3 homeowners policy?
An HO3 is the most common homeowner's policy in the U.S. The dwelling is open peril: covered unless a cause is excluded. Personal property is named peril: only listed risks such as fire, theft, and water damage. For damage to the house, the insurer has to prove an exclusion applies.
What does HO3 insurance cover?
In general terms it packages Coverage A on the dwelling, Coverage B on other structures, Coverage C on personal property, Coverage D for loss of use, Coverage E personal liability, and Coverage F medical payments to guests. Default pieces often include other structures at 10% of the dwelling limit and personal property at 50-70%. Specific coverage, exclusions, and limits vary by carrier and state.
Does HO3 cover flood?
No. Flood is a standard gap on an HO3. Coverage A does not cover floods, and a separate NFIP or private flood policy is what fills that hole. Earthquake, sewer backup, and many high-value items are common gaps too.
What is coverage A on a homeowners policy?
Coverage A is the dwelling: walls, roof, and built-ins. Insure it for rebuild cost, not market value, because market value includes land and land does not need insurance. Review the limit yearly; construction inflation can leave you underinsured. Floods, earthquakes, and maintenance issues are not covered here.
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This guide provides general information about HO3 homeowner's policies. Specific coverage, exclusions, and limits vary by insurance carrier and state. Always review your actual policy documents or contact us for personalized advice.