What type of policy is an HO-3?

An HO-3 policy is characterized as an "All-Risk" policy for the dwelling and a "Named Peril" policy for the contents contained within the home. This means that the structure of the home is covered against a wide range of risks, except for those specifically excluded within the policy. Examples of exclusions might include floods, earthquakes, or general wear and tear.

Conversely, the personal property or contents inside the home are only insured against specific risks that are explicitly listed in the policy. This could include risks like fire, theft, or vandalism, but excludes any risks not mentioned in the policy's wording.

This structure provides homeowners with broader coverage for their dwelling while still giving them focused protection for their personal belongings. Homeowners can thus have peace of mind knowing that most significant risks to the structure itself are covered, while being aware of the limits on coverage for personal items.