CBS Insurance Group is an independent insurance brokerage agency that carries some of the best coverage options in the Florida.

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An HO5 insurance policy is a type of homeowners insurance policy that provides broader protection and higher coverage limits than the typical options.

What is an HO5 homeowners policy?

Think of an HO5 policy like the Tesla Model X of insurance policies. It takes your basic homeowners insurance coverage and adds a number of significant perks.

For instance:

Losses and damages are repaid on a replacement cost basis

There are expanded limits for losses and damages to valuable items like jewelry, electronics, or even silverware

Your belongings are covered on an open perils basis, meaning that you’re covered against any type of loss or damage unless it’s explicitly excluded 

HO3 policies are available to all home types, and it’s at the insurance company’s discretion whether to accept your application for insurance. HO5 policies, on the other hand, are primarily available only for newer homes in areas with a low risk of natural disasters, crime, and other risks that could cause losses or damages.

HO3 vs HO5

An HO3 policy is the more common type of homeowners insurance policy, and it’s what Lemonade offers. 

HO3 and HO5 policies are pretty similar in their overall structure, but as previously mentioned, HO5 policies are a bit more comprehensive, and cover more damages on an ‘open perils’ basis. 

Let’s take a look at some of the differences and similarities between the two. 

Dwelling coverage (coverage for your physical house, condo, etc., as well as attached structures)

HO3: Open Perils

HO5: Open Perils

Personal property coverage (coverage for your belongings, like a bike or laptop)

HO3: Named Perils

HO5: Open Perils

How you’ll be reimbursed if you file a covered claim

HO3: Actual cash value

HO5: Replacement cost

Scheduled personal property

HO3: Extra coverage for valuable stuff (like engagement rings or art) is added, item by item.

HO5: Additional coverage for these sort of items is already built in

Should I get an HO3 policy or an HO5?

If you have a newer home in a relatively low-risk area with a high property value relative to the rest of your state, it would be a good idea to ask your insurer about an HO5 policy. If it’s in the same price ballpark as an HO3 policy, it may be worth the investment.

Otherwise, an HO3 homeowners policy will likely provide sufficient coverage for your home—just make sure you have set appropriate limits of liability, and know that you can “schedule” specific, valuable items to provide extra coverage for them.