What Is HO-1 Insurance and What Does It Cover?

Homeowners insurance provides financial protection against unexpected damage to a home and its contents. One of the most basic and limited types of coverage available is known as Homeowners Form 1, or HO-1 insurance. This policy operates on a “named perils” basis, meaning it only covers damages caused by specific events explicitly listed within the policy document. Due to its narrow scope, HO-1 insurance is less common today, and its availability is limited in many states.

Property Covered by HO-1

An HO-1 policy primarily protects the physical structure of the dwelling, including the house, walls, roof, and foundation. It typically extends coverage to other structures on the property, such as detached garages or sheds. Personal property (contents within the home) may also be covered by an HO-1 policy, though some policies may exclude it. When personal property is covered, the coverage amount is often a percentage of the dwelling coverage, commonly ranging from 50% to 70%.

Covered property is often valued using the “actual cash value” (ACV) method. ACV is calculated by taking the replacement cost of an item and subtracting depreciation for its age and wear. This means that if an item is damaged, the payout will reflect its depreciated value rather than the cost to purchase a brand-new replacement. While the dwelling might sometimes be covered at actual cash value, personal property is frequently subject to this depreciation.

Named Perils in HO-1 Policies

HO-1 policies cover a predetermined list of events, known as named perils, that can cause damage to insured property. If damage results from an event not on this list, the policy will not provide coverage. These policies generally cover about 10 to 11 specific perils.

Common perils include fire or lightning, windstorm or hail, and explosions. Damage caused by riot or civil commotion, aircraft, and vehicles is also typically covered. Further protections extend to damage from smoke, vandalism or malicious mischief, theft, and volcanic eruptions.

Common HO-1 Exclusions

HO-1 policies explicitly exclude certain events or types of damage, meaning no coverage is provided even if a named peril caused an otherwise excluded loss. These exclusions significantly limit the policy’s protective scope. Common exclusions include damage from floods and various earth movements, such as earthquakes, landslides, or mudslides.

Additionally, certain types of water damage are typically excluded, such as those resulting from sewer backups, sump pump overflows, or continuous leakage and seepage over time. Damage due to power failure or surges, acts of war, and nuclear hazards are also standard exclusions. Policies generally do not cover intentional acts by the insured, neglect, or damage resulting from wear and tear. Coverage related to ordinance or law changes and pest infestations is also commonly absent. Many of these excluded risks require separate insurance policies or specialized endorsements for coverage.