Differences in Minnesota Home Insurance Coverages

Your home is likely to be the largest asset owned during your lifetime; with the untapped equity often making the most significant contribution to your retirement savings. It is also the place where you raise and live with your family. It is for these reasons that every home must be protected from routine risk factors that may damage the property that often reduces the value of the home if left in disrepair.

The most effective way to protect your home is to carry a Minnesota home insurance policy. Homeowner’s insurance coverage is designed to financially reimburse you should the damage be the result of a covered ‘peril.’ In the insurance world, a peril refers to the cause of a loss.

Minnesota properties are generally insured by either an HO-3 Homeowner’s policy or an HO-5 Homeowner’s policy. While both types of homeowner’s insurance policies offer similar coverage, there are differences to consider that just may impact which policy you select for your specific situation.

The HO-3 Homeowner’s Insurance Policy

An HO-3 policy offers sufficient insurance coverage to Minnesota homeowners; however, the HO-3 limits its coverage to the basic perils detailed in the policy. Generally speaking, most HO-3 homeowner’s insurance policies include this standardized list of 16- named perils.

• Fire
• Smoke
• Lighting
• Vehicles
• Freezing
• Damage by an aircraft
• Theft
• Falling Objects
• Windstorms
• Sudden & Accidental Tearing Apart, Cracking
• Vandalism
• Explosion
• Volcanic Eruption
• Damage from water overflowing from A/C etc.
• Civil commotion
• Damage due to the weight of snow or ice

The HO-3 homeowner’s insurance policy also covers the contents of the home, although more restrictions apply to this defined coverage in the HO-3 insurance policy.

The HO-5 Homeowner’s Insurance Policy

An HO-5 homeowner’s insurance policy offers extended homeowner’s coverage beyond the basic peril coverage contained in the HO-3 insurance policy. Essentially, HO-5 homeowner’s insurance coverage provides insurance reimbursements for damage to a home (and its contents) for any reason, other than the typical homeowner’s exclusions.

Excluded Perils for the HO-3 and the HO-5 Insurance Policies

The following is a partial list of the standard perils excluded from both HO-3 and HO-5 policies.

• Negligence
• Power Failure
• War
• Flood damage
• Government Action
• Nuclear Accidents
• Earthquake, to name a few.

The Take-Away

When comparing the HO-3 and the HO-5 insurance policies side-by-side, the HO-5 policy wins hands-down as far as the coverage offered. While the HO-3 homeowner’s insurance policy is more cost-effective, there is typically only a small difference in price to receive the additional insurance coverage and benefits provided by the HO-5 insurance coverage. To help decide upon the policy that meets your insurance needs (and budget), contact the insurance professionals at the WA Group.

More Home Insurance Coverage Information

The video below was produced by Dustin Lano of WA Group. It is for people who are current homeowners or people who are on the market for a home.

There are two different insurance policies you can purchase when going after home insurance. One is a H0-3 and one is a HO-5. And both policies do a great job of covering the personal property.

The HO-3 policy will actually cover things such as fire, wind, and lightning. We call those, the basics. But HO-5, on the other hand, covers the basics plus more.

As an example, this past winter gave us a lot of snow. That snow built up on top of the houses and then sat on top of the roof. As things finally begin to warm up, the snow melts and water can leak inside the house – a common occurrence here in Minnesota. This leaking can cause damage to personal property.

Unfortunately, the HO-3 Policy doesn’t cover that occurrence because it only covers the basics. Where the HO-5 policy would cover it. So for about $50 more per year, we recommend the HO-5 Policy.

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