HO-1 Homeowners Insurance: 16 Key Coverage Limits Explained

Most homeowners I talked to during my adjuster years had never heard of an HO-1 policy. That’s not an accident. By the time I was processing claims in the mid-2000s, HO-1 policies had already been discontinued by most major insurers across the country, quietly shelved because even the companies selling them knew the coverage was too thin to be practical. And yet people still ask about them, still sometimes find them offered in hard-to-insure markets, and still make the mistake of thinking “basic” means “good enough.”

Here’s the number that stopped me cold when I first dug into this: an HO-1 policy typically covers only 11 named perils, compared to the 16 covered by the standard HO-3 that most Americans carry today. That gap doesn’t sound dramatic until you realize the missing five perils include things like falling objects, weight of ice and snow, and accidental discharge of water from plumbing. Translation: if a pipe bursts in January and floods your kitchen, an HO-1 says that’s your problem.

I’ll be honest, I thought the HO-1 was purely a historical footnote until a reader named Patricia from rural Mississippi emailed me last spring. She’d been offered one by a regional carrier after two non-renewals, and she wanted to know if it was worth taking. That conversation is what sent me back into the research.

What an HO-1 Actually Covers

The HO-1 is what the industry calls a “named perils” policy, which means coverage only applies if the specific cause of damage is listed in your policy document. If it’s not named, it didn’t happen, as far as your insurer is concerned. The standard 11 perils covered are: fire and lightning, windstorm and hail, explosion, riot or civil commotion, aircraft damage, vehicle damage, smoke, vandalism, theft (in most but not all versions), volcanic eruption, and glass breakage.

What surprises most people is what’s not there. No coverage for falling objects, so the tree limb that punches through your roof during a storm but doesn’t cause a fire? Probably excluded. No weight of ice or snow coverage. No accidental water discharge from appliances or plumbing. No freezing of pipes. No sudden collapse of a building structure.

I processed a claim once where a family had an HO-2 (one step up) and their dishwasher supply line failed while they were on vacation. The resulting water damage ran to just over $14,000 in repairs. Covered under HO-2 because “accidental discharge” was listed. Under an HO-1, that family would have written a check themselves. That specific scenario is why the gap between these policy forms is not theoretical.

The Peril Comparison You Actually Need

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This table compares what each basic form covers. As of August 2026, these are the standard industry definitions as tracked by the Insurance Information Institute (III):

HO-3 is the form that covers your house’s structure on an “open perils” basis, meaning everything is covered unless specifically excluded. That’s the meaningful leap from HO-2 to HO-3, and it’s why HO-3 dominates the market. The National Association of Insurance Commissioners (NAIC) reports that HO-3 policies account for the substantial majority of homeowner policies in force today in the U.S.

Why HO-1 Still Exists at All

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This is where it gets interesting. The HO-1 wasn’t killed off because it stopped working legally. It persists because there are situations where it’s the only product a carrier is willing to issue. Think vacant homes awaiting sale, deeply distressed properties in high-risk zip codes, or owners who’ve had multiple claims and can’t qualify for standard underwriting. In those situations, an HO-1 from a surplus lines carrier (or a regional company still writing them) is often the only thing standing between a homeowner and zero coverage.

What surprised me in my research was how often this comes up in coastal and inland flood-prone markets. A homeowner who’s had two claims in three years might find their standard carrier drops them at renewal. Surplus lines markets step in, but the product they offer sometimes resembles an HO-1 in scope even if it carries a different name. Patricia’s situation in Mississippi was exactly this: two wind-related claims in four years, and the only renewal offer she got was a bare-bones named-perils form from a carrier she’d never heard of, at a premium only $200 less per year than she’d been paying for her HO-3.

That’s the part that should make you skeptical. An HO-1 that costs only 15-20% less than an HO-3 is a bad deal almost by definition.

The Real Cost Calculation

Premiums for HO-1 policies vary widely and I don’t have good apples-to-apples numbers across states, so I can’t give you a confident average. What I can tell you from experience: the discount relative to an HO-3 is rarely as large as people expect, often somewhere between $150 and $400 annually depending on the home’s value and location. Meanwhile, the coverage gap on a single mid-size water damage or falling object claim can run $8,000 to $25,000 out of pocket.

Run that math. Three years of $300 savings is $900. One excluded claim costs you multiples of that.

Worked examples, based on industry claim data and my own file experience:

Homeowner with HO-1 in Ohio, ice storm causes roof collapse from snow load → Peril not covered → $18,200 repair bill paid out of pocket.

Homeowner upgrades from HO-1 to HO-2 mid-term for an added $22/month → Dishwasher supply line fails four months later → $11,400 water damage claim paid in full after $1,000 deductible.

Patricia in Mississippi accepts HO-1 for one year while working on claim history → Gets re-quoted by two standard carriers 14 months later → Moves back to HO-3 at $180/year more than the HO-1 cost. Net cost of the gap year: manageable, but only because nothing happened.

Sources

• Insurance Information Institute (III): Policy form definitions, peril comparisons, and U.S. homeowner policy type distribution data.
• National Association of Insurance Commissioners (NAIC): Market share data on homeowner policy forms in force across U.S. states.
• NAIC Homeowners Insurance Report: Annual data on claim frequency and policy type trends (most recent available: 2025 report).
• III “Homeowners Insurance Basics”: Overview of covered perils across HO policy forms.

Photo: Mikhail Nilov via Pexels

This article is for general informational purposes only and does not constitute insurance advice. Coverage details, exclusions, and costs vary significantly by insurer, policy type, and location. Always review your policy documents and consult a licensed insurance professional for advice specific to your situation.

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