How does it work?
The HO3 and HO5 policies both cover a policyholder's house on an open peril basis. The difference is in how it protects personal property.
HO5 comes with better coverage, meaning it also comes with a higher price. The value is based on whether the additional cost is worth the benefit. If you’re speaking with someone that is more budget conscious as a new or existing homeowner, then the less expensive HO3 policy may be the way to go. But if your customer is worried about the cost of having to replace their belongings in the event of a large loss, HO5 can offer peace of mind.