HO3 vs HO6 Policies: What Is the Difference?

The world of insurance can be confusing if you don’t have a solid grasp of some basic industry terms. For example, what is the difference between HO3 and HO6 policies? Follow along to discover the answer.

What Is an HO3 Policy?

An HO3 policy (also known as HO-B in Texas) offers named perils protection for the contents of your house and open-perils protection for the structure of your house itself.

In other words, with an HO3 policy, your possessions are protected against the risks listed in your policy, while your home is protected against all risks — unless specifically excluded in the wording of your policy.

The perils excluded from your coverage may vary. Some common exclusions are:

Earthquake
Flood
Wear and tear
Mold
Fungus and rot
Mice
Insects and other pests
Continuous and repeated seepage of water

HO3 policies also offer liability coverage and loss of use (also known as ALA, or Additional Living Expenses).

What Is an HO6 Policy?

HO6 policies are designed for owners of condominiums or co-op units. That’s why HO6 policies are also known as Condo Insurance.

In general, HO6 policies provide the following coverages:

Dwelling. Protects your unit in case it’s damaged by a covered loss.
Personal property. Pays the cost of repairing or replacing belongings such as furniture and electronics, up to the limits stated in your policy.
Liability. Helps pay for legal expenses if you are deemed responsible for damages or injuries caused to others.
Loss of use. Pays the costs of living elsewhere (up to your policy’s limits) if your unit is rendered uninhabitable due to a covered risk.
Loss assessment. Helps cover your portion of damage to common areas when this damage exceeds the limits of your condo association’s master policy.

It’s worth noting that an HO6 policy doesn’t cover the common area of your building. Those areas are usually protected by your homeowners association’s master policy.