Property claims glossary
What is an HO-3 policy?
An HO-3 is the most common US homeowners policy form: it covers the dwelling and other structures on an open-perils basis, meaning anything not excluded is covered, and personal property on a named-perils basis. Because the dwelling is covered unless something is excluded, the exclusions and endorsements usually decide an HO-3 dwelling claim.
Worked example · fictitious claim
A tree falls on a house insured under an HO-3 with a $400,000 dwelling limit and a $2,500 deductible. Dwelling repairs are $22,000 and damaged contents are $3,000, both from a covered peril, for a total of $25,000. The payment before depreciation is $25,000 − $2,500 = $22,500.
How it affects a settlement
On an HO-3, the dwelling is usually settled at replacement cost and contents at actual cash value unless an endorsement upgrades them, so one claim can carry two settlement bases. That split decides how much is paid up front and how much is held back as depreciation.
In practice
The most common US homeowners form: open-perils coverage on the dwelling (everything is covered unless excluded) and named-perils coverage on contents. The 'unless excluded' clause is what makes exclusion analysis decisive on HO-3 claims.
Related
DP-3 policy · Exclusion · Policy coverage checking · property claims glossary