Insurance Curator Choosing the right homeowners policy is one of the most important financial decisions for homeowners in the United States. Two of the most common options are the HO‑3 (Special Form) and the HO‑5 (Comprehensive Form). This guide breaks down the differences, real-world cost considerations for specific U.S. locations, when to upgrade to HO‑5, and how major insurers price these options so you can make a market-smart choice.
Quick overview: What HO‑3 and HO‑5 actually cover
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HO‑3 (Special Form)
- Dwelling and other structures: open-peril (covers all losses except those specifically excluded).
- Personal property (contents): named-peril (covered only for listed perils such as fire, theft, windstorm).
- Most standard choice for average homes.
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HO‑5 (Comprehensive Form)
- Dwelling, other structures, and personal property: open-peril (broader protection for belongings).
- Typically includes higher limits or broader automatic coverage for high-value items, fewer exclusions on electronics, jewelry, and collections.
- Often recommended for higher-value homes or homeowners wanting superior contents protection.
Head-to-head: Key differences (at a glance)
- Coverage scope: HO‑5 > HO‑3 for personal property and certain loss types.
- Cost: HO‑5 typically costs 15–30% more than HO‑3, depending on insurer and location.
- Best for:
- HO‑3 — middle-market homes, standard belongings, budget-conscious buyers.
- HO‑5 — high-value homes, expensive personal property, homeowners who want minimal sublimits and broader coverage.
When HO‑5 makes financial sense
Choose HO‑5 if you meet one or more of the following:
- You own expensive electronics, art, jewelry, or collectibles that exceed typical sublimits.
- You want open-peril coverage on contents (fewer denials and easier claims).
- You have a high-replacement-cost dwelling and can afford the premium increase.
- You live in a relatively low-claims-cost area where insurer pricing for HO‑5 is competitive.
If you have a high-value home, read our guide on Best Insurance For Homeowners With High-Value Homes: Scheduled Personal Property and Coverages You Need.
Cost comparison: Illustrative market estimates by city (2024 estimates)
Below are illustrative examples to show how HO‑3 vs HO‑5 premiums typically compare in different U.S. markets. These figures are estimates based on national insurer rate surveys and publicly available data; actual quotes will vary by insurer, credit, claims history, construction type, and exact ZIP code.
| City (example) | Typical HO‑3 annual premium (estimate) | Typical HO‑5 annual premium (estimate) | HO‑5 premium vs HO‑3 |
|---|---|---|---|
| Phoenix, AZ | $1,300 – $1,600 | $1,600 – $2,000 | +20–25% |
| Miami, FL | $2,400 – $3,200 | $2,900 – $3,900 | +20–25% |
| Portland, OR | $1,000 – $1,400 | $1,200 – $1,700 | +15–25% |
| Austin, TX | $1,200 – $1,600 | $1,450 – $2,000 | +20–30% |
Notes:
- Florida (e.g., Miami) often has much higher premiums due to hurricane exposure and insurer market restrictions; your premium can vary widely by county and wind mitigation features.
- Premiums shown are illustrative; for state-by-state and company averages see resources below.
For guidance on comparing local rates and claims service, see Best Insurance For Homeowners in Your City or ZIP: How to Compare Local Rates and Claims Service.
Company examples and pricing signals
Different insurers price HO‑3 and HO‑5 differently. Market surveys and consumer data commonly show:
- USAA (available to military families) tends to be among the lowest average-cost options for eligible customers (often near or below national median).
- State Farm commonly offers middle-of-market pricing and wide agent network; often competitive on HO‑3.
- Allstate, Farmers, Liberty Mutual, Nationwide often show higher-than-statefarm averages but provide various discounts and endorsement packages.
Example market-average signals (survey-based estimates):
- USAA: commonly near $1,000–$1,200 annually (HO‑3 baseline in many markets).
- State Farm: commonly near $1,200–$1,400 annually (HO‑3).
- Allstate: commonly near $1,500–$1,800 annually (HO‑3).
HO‑5 with the same carriers often runs ~$300–$700 more per year depending on location and limits. Use local quotes; insurers vary by state. For company rate comparisons and averages see the insurer surveys referenced below.
Add-ons, endorsements and important coverages to consider
- Scheduled personal property — protects expensive items above standard sublimits. Essential if you have jewelry, high-end cameras, fine art.
- Water backup and sewer coverage — often not included; add if you have a finished basement.
- Ordinance or law coverage — pays to rebuild to current code after a covered loss.
- Replacement cost vs actual cash value — choose replacement cost for dwelling and major items to avoid significant depreciation deductions (see our related article: Best Insurance For Homeowners: Replacement Cost vs Actual Cash Value—Save on Claims).
If you’re also insuring vehicles, ask about bundling — it frequently reduces both auto and homeowners premiums. For more, see Best Insurance For Homeowners to Bundle With Auto: Pros, Cons and Top Bundling Discounts.
How to decide: practical checklist before you buy
- Get at least 3 detailed quotes (same limits and deductibles).
- Ask whether contents are insured on a named-peril (HO‑3) or open-peril (HO‑5) basis.
- Check sublimits for jewelry, electronics, and collections; consider scheduling items.
- Compare replacement-cost limits and whether the policy includes guaranteed or extended replacement cost.
- Review insurer claims ratings and financial strength (J.D. Power, AM Best). See Best Insurance For Homeowners Based on Insurer Claims Ratings and Customer Service.
- Verify discounts (bundling, security systems, newer roof, claims-free).
Claims and real-world outcomes
- HO‑5 claims for personal property tend to be easier to approve because the policy covers open-perils for contents; this can reduce disputes about whether a particular loss is a covered peril.
- HO‑3 may require stronger documentation to prove a named peril caused the loss (e.g., proving theft vs mysterious disappearance).
For step-by-step claim guidance see Best Insurance For Homeowners When Filing a Claim: Step-by-Step Guide to Maximize Payouts.
Final recommendation
- Choose HO‑3 if you want solid dwelling protection at a lower premium and you have standard-value personal property you can insure with modest sublimits or scheduled items.
- Choose HO‑5 if you have higher-value contents, want broader protection for belongings, or own a higher-end home and want fewer claims disputes — and you can absorb the typical 15–30% premium increase.
Get personalized quotes from multiple insurers and compare identical limits and deductibles. A small premium difference can save you thousands at claim time.
Sources and further reading
- Bankrate — How much homeowners insurance costs by state (data and state averages): https://www.bankrate.com/insurance/homeowners-insurance/cost-by-state/
- Forbes Advisor — Average cost of homeowners insurance and insurer comparisons: https://www.forbes.com/advisor/homeowners-insurance/average-cost/
- NerdWallet — HO‑5 vs HO‑3: what the forms cover and typical pricing differences: https://www.nerdwallet.com/article/insurance/ho5-vs-ho3-homeowners-insurance