The largest difference between the two types of policies are that an HO3 policy is specifically for a house that is owner occupied and an HO6 policy was created for a condo unit owner. The HO3 policy is a mixture of named perils and open perils coverage. The HO6 policies tend to be fully named peril policies. Named perils are items that are specifically listed in the policy and open perils cover things not specifically excluded in the policy.
HO6 policies are also known as condo insurance. This type of policy traditionally will only cover your personal property, personal liability, your walls, floors, and your ceilings. Many people also refer to it as “walls-in” insurance since it essentially covers everything within the interior of the unit. An HO6 policy will not cover any of the building items outside of your condo unit. This is why it is important to review your condo by-laws to understand what you are responsible for insuring vs. what the association will cover.
An HO3 policy is one of the most comprehensive homeowners insurance policies. These policies provide coverage for single family homes, townhouses and duplexes that are owner occupied. The HO3 insures the house you own and occupy, structures in connection with that property, personal property on and away from the premises, and loss of use*. Personal liability coverage and medical payments coverage are also provided by this policy.
*Loss of Use is an insurance coverage that covers expenses incurred when you, the homeowner, cannot temporarily use property due to a covered loss.