Home insurance companies have different policies for different homes and households. HO3 is the standard policy that many people have. The HO5 policy is a premium policy that you should consider. Below are a few things you should know about the HO5 policy. 

1. Covers Everything Except Exclusions

A standard HO3 policy covers only the listed perils. An HO5 policy is more comprehensive and covers more perils. With a standard policy, you expect the insurance to pay your damages unless the policy specifically excludes the peril. As such, you will likely have more claims paid by a HO5 policy.

2. Burden Of Proof Lies With Insurance Company

Processing a standard insurance claim requires you to prove you suffered damage that your policy lists as covered. This burden of proof is not easily attainable. You have to go through various hoops to get your insurance settlement.

However, filing a claim under an HO5 policy involves fewer hoops. In this case, the burden of proof lies with the insurance company. You expect the insurance company to settle your claim unless it proves that the damage is in your policy's exclusion list.

3. Require More Investment than HO3

The comprehensive nature of the HO5 policy means it costs insurance companies more money than more limited policies. The insurance companies must capture this difference in calculating insurance premiums. As such, you require more investment for the HO5 policy.

4. Best Suited For Those with Significant Property

The HO5 policy is great, but that doesn't mean every household needs one. For one, the investment the policy requires means buying it makes sense only if you want to protect valuable property.

Remember, the HO3 policy covers your belongings up to a pre-determined limit. This limit is typically relatively low; it might not suffice if you have many valuable items. However, the HO5 version extends the limit for better compensation.

5. Has a High Qualification Barrier

Lastly, you should know that insurance companies limit who can get HO5 policies. The comprehensive coverage the policy provides means it can be very expensive to use on households with high risks of frequent or costly damages. For example, you might not get the policy if your home is old or your neighborhood experiences frequent weather damage.

The right home insurance policy depends on many actors, including your home, neighborhood, and valuables, among other factors.

Talk to a home insurance agent to learn more about homeowners insurance options.