HO3 Homeowners Insurance

An HO3 is the most common type of homeowners insurance and generally regarded as the minimum coverage necessary in order to get a mortgage. It’s a type of homeowners insurance that covers your home, the contents of your home, other structures on your property, personal liability, and medical payments. There are many nuances involved that are important to understand before determining if an HO3 is the right homeowners policy for your insured.



Features of an HO3 Policy*
An HO3 homeowners insurance policy is typically divided into 6 coverages: A, B, C, D, E, and F.

CoastalPersonalLines Coverage A – Dwelling

This covers the actual house you live in and any attached structures, like a garage or an attached guest house. Your house is covered on an open peril basis. This means that your home is insured for any event unless specifically stated otherwise.

Events that are commonly excluded from this coverage are earthquakes and floods. Orchid’s minimum coverage for HO3 policies is $200,000 in most states.

CoverageB-OtherStructures Coverage B – Other Structures

This covers the other structures you may have on your property, the things that are not attached to your house. You’ll commonly see pools, sheds, fences, and detached garages listed here. On average your other structures are covered up to 10% of your Coverage A amount.

For example, if your insured value for Coverage A was $500,000, your other structures would be covered up to $50,000. At Orchid we offer flexible coverage limits. We allow Coverage B amounts up to 30% of your Coverage A value.

Coverage C - Personal Property Coverage C – Personal Property

This covers the contents of your home. An important thing to note here is that you will be reimbursed for your damaged items based on their actual cash value. This takes depreciation into account and you will only be paid based on the value of your items now on the open market.

Unlike the house, your contents are only covered for named perils. This means that you will only be reimbursed for damage due to events specifically listed in your contract. If it isn’t listed, you’re not covered. At Orchid, we allow Coverage C amounts up to 70% of your Coverage A value.

Coverage D - Loss of Use Coverage D – Loss of Use

This covers you in the event that your home becomes uninhabitable. Loss of use covers the costs of staying in a hotel and any additional living expenses you incur due to your home being uninhabitable.This coverage is usually on a named perils basis and limited to a certain period of time. On average, loss of use coverage is 10% of your Coverage A value. At Orchid we allow Coverage D amounts up to 30% of your Coverage A value.

Coverage E - Personal Liability Coverage E – Personal Liability

This will cover expenses due to injury or damage for which you are at fault. You’ll be covered for the cost of a lawyer to defend you in court and any damages you’re found legally liable for.

On average, an HO3 policy includes $100,000 of personal liability coverage, but you can increase this amount if you’d like. At Orchid, our minimum liability starts at $300,000. Regardless of the minimum liability amount, you can increase this limit if you’d like.

Coverage F - Medical Payments Coverage F – Medical Payments

This will be applied in similar situations as Coverage E. You’ll be reimbursed for medical bills and prescription costs if people are hurt on your property or by your pets.

Usually Coverage F limits are determined by the company issuing the policy.

If an HO3 policy sounds like the right fit for your insureds’ needs, don’t hesitate to contact us.

Orchid offers HO3’s with a minimum value as low as $200,000 and can even add an endorsement to cover short term rentals. To become a partner with Orchid and gain access to all that we have to offer, visit our Get Appointed page.

*Coverage varies by carrier and location.

Get Appointed

As an Orchid-appointed partner, your agency’s success is our priority. You can rely on our dedicated support and expertise to offer your clients best-in-class service.

Start Quoting

Orchid online quoting is your quickest and most convenient resource for paperless quoting and binding.