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Return To: North Carolina Homeowners Insurance – The Ultimate Guide

A whopping $15 billion — that’s how much U.S. victims of burglary, larceny, and car thefts lost in 2017. Of this, larceny-theft was the most common, accounting for 71.7% of all property crimes that year. Burglary came in second, with one having occurred every 22.6 seconds. 

Fortunately, home insurance helped cover many of the losses suffered by these victims. After all, of the insured homes that had a claim in 2017, 98.1% were for property damage, including theft. 

All these should already give you an idea of how valuable homeowners insurance is. 

But theft is only one of the “perils” that most standard types of home insurance provide coverage for. Depending on the specific form of policy you have, it may protect you from a long list of perils. 

Ready to learn more about homeowner’s insurance types? Then keep reading as we’ve listed the most important facts you need to know about them! 

What Is Covered by Most Common Home Insurance Policies? 

Common home insurance forms have similar insured perils, so let’s discuss these first. This will make it easier to compare them and figure out which one is the best homeowners’ policy for you

The “HO-2,” “HO-3,” and “HE-7,” home insurance policy forms have 16 similar insured perils. These three are often purchased for single-family homes. 

The 16 Perils Covered By Home Insurance

All three policy types protect both the dwelling and contents against these perils. The “dwelling” is your home’s structure, whereas the “contents” are your personal belongings. 

The HO-2 Policy

3610 Heathrow Dr | Winston Salem, NC | Listed By Mantle Realty
3610 Heathrow Dr Winston Salem NC Home For Sale By Mantle Realty

Also known as the “Homeowners Broad Form”, the HO-2 policy is the most basic of all home insurance policies. That’s because it only insures against the 16 above-mentioned perils. 


The HO-3 Homeowners Policy

646 Gilreath Loop Rd | Mills River, NC | Listed By Becky Corthell
646 Gilreath Loop Rd Mills River NC Listed By Becky Corthell

Also called the “Homeowners Special Form,” the HO-3 policy has broader coverage than the HO-2 form. Aside from the 16 named perils, it also protects against most other perils. Any other peril that the policy doesn’t specifically exclude, the HO-3 form will cover. 

This “extra” coverage is also referred to as “open perils”. This portion of the HO-3 policy will cover the dwelling for almost any type of direct physical damage. “Almost,” as these policies always have specific exclusions. 

These exclusions often include earthquakes, landslides, sinkholes, and nuclear accidents. It also doesn’t cover flooding, so be sure to check your flood insurance options. Especially if you live in a flood-prone area. 

Note that HO-3 policies only provide the open perils coverage for the dwelling though. Meaning, it won’t cover damages to your personal belongings caused by a peril outside of the 16 named ones. 

The HE-7 Policy aka The HO-3 On Steroids 

4203 Majestic Oaks Dr | Randleman, NC | Listed By Mantle Realty
4203 Majestic Oaks Dr Randleman NC Listed By Mantle Realty

The “Homeowners Enhancement Form,” or HE-7, is the broadest of all home insurance forms in NC. Like the HO-3 policy, it also protects against all 16 perils and also has an open perils portion. The difference is that the HE-7 policy’s open perils coverage includes personal property. 

The Base HE-7 Home Insurance Policy is basically a fully endorsed HO-3 (Replacement Cost Contents & Replacement Cost Dwelling) 

As you can see, the HE-7 policy is the most comprehensive protection for your home. This covers both your home’s structure and contents against almost any type of peril. It still has exclusions though, so make sure you know exactly what it won’t protect you from. 

The Base HE-7 Home Insurance Policy is basically a fully endorsed HO-3 (Replacement Cost Dwelling & Replacement Cost Contents).  Obviously there are differences between the HO-3 vs the HE-7, but the real differences comes when you add the HE21 (Extended Enhancement Endorsement) to the HE-7.  

Also, since it has the most in-depth coverage, it can be more expensive than other home insurance policy forms. But if you want the greatest level of protection, then this may be the best home insurance form for you. 

Other Types of Homeowners’ Insurance Policies 

There are also home insurance policies for rented properties, condominiums, and older homes. 

The HO-4 Policy (Renters Insurance)

If you rent a house or an apartment, then you may have to purchase an HO-4 policy. Also called the “Homeowners Contents Broad Form,” this covers the renter’s personal property. It also provides liability coverage. 

HO-4 policies only protect the contents of a rental unit from the same 16 perils covered by HO-2 policies. Insuring the dwelling or structure is the responsibility of the rental property’s owner. 

The HO-6 Policy (For Condo Owners)

3479 Forestdale Dr | Burlington, NC | Listed By The Command Team Of Keller Williams
3479 Forestdale Dr Burlington NC Listed By The Command Team Of Keller Williams

A Homeowners Unit-Owners Form, or HO-6 policy, covers the contents of a condominium unit. Like the HO-4 form, HO-6 policies also insure personal property against the same 16 perils. As for structure coverage, this is often shouldered by the condominium association. 

The HO-8 Policy (For Owners of Older Homes)

The HO-8 policy, or Homeowners Modified Coverage Form, is often used to insure older homes. It’s usually purchased when the cost of home replacement is higher than the home’s market value. 

Unlike other homeowners’ policies, the HO-8 policy only protects against 10 perils. These include: 

As you can see, the HO-8 policy excludes coverage for damage caused by falling objects and ice, snow, or fleet. If you want your older home insured against these, you’d need to get separate coverage. 

Get The Best Homeowners’ Insurance For Your Needs Now

There you have it, your ultimate guide on the types of home insurance you can choose from today. While it may not be legally-required like car insurance, it’s just as important to have. That’s why you should start shopping around for a homeowners’ insurance policy as soon as you can. 

We can help you begin your quest for the best home insurance policy. Feel free to request your insurance quote now! 

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