HO-5 vs. HO-3 Homeowners Policies. What’s The Difference?


Note: This discussion applies only to Insurance Services Office (ISO) coverage forms. These are used by most insurance companies in Maine. Some insurers (Allstate, State Farm, Travelers and more) use their own proprietary forms. If you have a quote or a policy from those companies, ask an agent to explain the coverage you’re buying.


All Maine homeowners policies are not created equal. In fact, if your policy is properly written, there may not be another like it. Common insurance policy forms have important differences, even though they look very similar.

HO3 vs. HO5

One key example is the difference between ISO HO-3 and HO-5 homeowners forms. The HO-3 was the most popular coverage form for decades. It covers a broad scope of building damages, but more limited coverage for your personal belongings.

A quick chart:




Open Perils – Covers any cause of loss unless excluded.

Named Perils –
Covers only damage from specified causes.



The HO-3 covers personal property against 16 named perils:

  1. Theft
  2. Fire or Lightning
  3. Freezing
  4. Windstorm or Hail
  5. Accidental Discharge or Overflow of Water from Plumbing
  6. Vehicles
  7. Smoke
  8. Weight of Ice, Snow, or Sleet
  9. Vandalism or Malicious Mischief
  10. Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging
  11. Sudden & Accidental Damage from Artificially Generated Electric Current
  12. Falling Objects
  13. Volcanic Eruption
  14. Riot or Civil Commotion
  15. Aircraft Damage
  16. Explosion

Why Buy HO-5 Instead of HO-3?

The open perils HO-5 form shifts the burden of proof from you to the insurance company. You’re not required to prove that the damage to your personal property was caused by one of the 16 named perils. It’s covered, unless it’s specifically excluded. Believe it or not, insurance adjusters prefer the HO-5 to the HO-3, too – even though it provides a lot more coverage. It makes proving coverage much more simple and easy.

What does an HO-5 Cover that an HO-3 Doesn’t?

Because the coverage is so broad, many additional types of damage are covered. Here are a few:

  • On a hot August day, a freak thunderstorm hits while you’re at work. Rain blows through an open window, damaging your home entertainment system.
  • At a dinner party, a guest spills a glass of red wine on your oriental carpet, damaging it.
  • A skunk finds its way through your open patio door. You startle it, and it sprays inside your home. All of your upholstered furniture must be deodorized.

Admittedly, these are uncommon claims. But clients often call insurance agents to report damage that’s NOT covered. Wouldn’t it be good to put the odds in your favor?


How Much Does It Cost?

The cost to upgrade from HO-3 to HO-5 varies by insurer. Believe it or not, an HO-5 with one insurer may cost LESS than an HO-3 with another.  Some insurers only offer HO-5 coverage for preferred properties and clients. That means you may qualify for very good pricing to begin with, which could save you money from your current HO-3 policy. If you qualify for both forms, the HO-5 is the preferred option.

Do you live in Southern Maine and have questions about your Maine homeowners insurance? Are you buying a home in Southern Maine and want insurance advice? Call a Noyes Hall & Allen Insurance agent.  Or, you can create your own Maine home insurance quotes online in 10 minutes. We offer a choice from many preferred insurers. We’re independent and committed to you.

Beware of “Teaser” Maine Homeowners Insurance Quotes


One of our employees received this solicitation from a competitor. It quotes a homeowners premium of $409 per year. That’s hundreds less than they pay now. How can that be? Is this “bait and switch”? Like most of these offers, if it sounds to good to be true, it probably is. The answers are in the fine print.

Example: 6 Cheap Homeowners Insurance Quote Tricks

Beware of "teaser" homeowners insurance quotes!
Beware of “teaser” homeowners insurance quotes! (click to enlarge)

1. Using the “Perfect Profile”

Every insurance company uses personal information to provide an accurate quote and policy for you. This may involve your insurance history, your insurance score (similar to a consumer credit score), your occupation and more. If you get a quote out of the blue without giving any of your information to anyone, you’re getting a generic quote, probably containing the absolute best rate, reserved for the theoretical human who fits the perfect profile. No one gets that rate.

2. Quoting On the Tax Assessor’s Value of Your Home

Tax assessments have nothing to do with insurance. Towns and cities revalue every several years to create a “just baseline” to compare properties for tax purposes. If it’s been years since the last revaluation, the figure is probably low. Assessed value has nothing to do with the cost to rebuild your home. Assessments are roughly based on market value, which is affected by location, condition, and acreage.

After a disaster, you want to have enough insurance to rebuild your home. Insurance companies want that, too. That’s why they require you to insure 100% of replacement cost. Usually, assessed value is far below your home’s replacement cost. For example, this home’s replacement cost is 20% more than the quoted amount. If they called for quote, the insurer would take information about their home, calculates its replacement cost, and bump the amount by 20%. That would increase the price.

This insurance company knows all of that, but chooses to ignore it. The lower amount means a cheaper quote. It’s appealing – until you think about it.

3. Inflating Your Insurance Score                         superior-credit-quote

As explained above, insurance companies use scoring to price your insurance. The higher your credit score, the lower your insurance price. This quote assumes that you’re in the top tier of insurance scores. Even people with excellent credit scores may not make the “superior credit” status. So, when you respond to the solicitation, your price probably goes up.

4. Presuming Your Home Was Just Built

This home was built in 1972. The tax assessor’s document clearly says that. Why would the insurance company quote it as if it was new? Because there’s a “new home discount”. That makes the rate lower, until you call in. Oops, no discount for you.

5. Assuming You Move All Your Insurancemultipolicy-quote

It’s no secret that you can get a lower price with most companies by bundling auto and property insurance. You should absolutely talk to your agent about bundling to see if it makes sense for you. It doesn’t always. What if this company’s car insurance rates are terrible? What if you don’t meet their underwriting requirements? What if…?

Without a package discount, this quote could be 20% higher – or more. And, think about it: if this insurance company uses shady quoting tactics on your home insurance, do you really want to trust them will ALL of your insurance?

6. Have You Really Had No Claims in 5 Years?

Maybe that’s true, maybe not. Five years is a long time. Many people forget that they’ve had claims. You could think it’s true, until the insurance company runs their reports. That plumbing leak? The water backup in the basement? Oh yeah. Those count. And, they can change this quote considerably.

Looking for a Real Maine Homeowners Insurance Quote?

If you are looking for homeowners, condo or renters insurance in Maine, and want a thorough review and a realistic proposal for your coverage, contact a Noyes Hall & Allen Insurance agent. We’re independent, so we offer a choice of preferred insurers in Maine. Prefer to start online?  Get up to 6 Maine homeowners insurance quotes in 10 minutes on our web site. If that’s as far as you want to go, we won’t hound you later. But, we’re happy to answer your Maine home insurance questions.

How to Buy Home Insurance in Maine: 4 Easy Steps


If you’ve recently begun looking for a home in Maine, or have recently put one under contract, you’ll soon be looking for Maine homeowners insurance. If you will have a mortgage, your lender will pester you for the name of your insurance agent and the cost of your insurance.

Insuring your new home is a simple 4-step process:

How to Buy a Home in Maine

1. Put your home under contract

2. Get a home inspection

Your realtor can introduce your to a reputable home inspector. They almost always point out some deficiencies, possible trouble spots, or upcoming maintenance items. It’s up to you whether you negotiate who pays for these with the buyer, or include them into your early home improvement budget. Don’t ignore them, though. For example, if the inspector tells you that your roof shingles have less than 5 years remaining life, set aside the cost to replace it within that time.

3. Contact an Insurance Agent 

You’ll want to get a Maine homeowners or condo insurance quote for 100% of the rebuilding cost to satisfy your lender. The agent will use real estate and property tax info and ask a few questions about your home to help determine the rebuilding cost.

The agent will also ask how recently the home systems were updated (plumbing, heating, electrical and roof). Your home inspection will be handy in providing this information.

If you live in southern Maine, a Noyes Hall & Allen agent would be happy to help you with insurance quotes. We represent many different insurance companies, so we can shop the marketplace for you. Different insurers have different appetites, strengths and rates. We can also help you choose appropriate deductibles and insurance programs to fit your needs and budget.


Twitter graphic_ Bundle

Bundle Up
It often makes sense to bundle your insurance with one insurance company. Most Maine insurers offer discounts when you insure your home and auto together. The savings can be substantial – up to 25% in some cases.


4.  Show proof of insurance to your lender

Once you introduce your insurance agent to your closing attorney (usually a title company), you shouldn’t have to do any work. Your agent and the title company will make sure the lender is satisfied. You can focus on getting ready to move into your home!

A Note About Escrow Accounts

If you escrow your insurance, lenders require you to pay the first year’s premium up-front – either to your insurance agent, or at closing. The lender collects a couple of months’ insurance and tax at closing to “seed” your escrow account. You’ll then pay 1/12 of those amounts along with your monthly mortgage payment. The insurance and tax bills will go to your lender, not to you.

If you have questions about Maine home, auto or condo insurance, contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. We’re independent and committed to you.

Should You Share Your Car? Think Twice!


Car sharing services like Zipcar and U Car Share have grown in popularity, as more city dwellers eschew car ownership, preferring to rent a vehicle when they need one. This seems to be an innovative, cost-effective and sensible way to solve personal transportation needs for many Americans.

We have followed this trend for several years, providing insurance advice about using a car share service, and cautioning our clients to protect themselves first. After all, when you’re sharing a vehicle, you could potentially be sharing something much more important: liability.

The car sharing idea has evolved even further. Now, private vehicle owners can offer their vehicles for rent through peer-to-peer car sharing services like RelayRides. It’s sort of like Zipcar in reverse: you can rent your idle vehicle to someone who needs it temporarily. Realizing that insurance companies would not approve of (or cover) this kind of use, RelayRides offers a $1 million liability policy. That’s more liability coverage than most people have on their own personal auto policies. But believe it or not, it may not be enough.

Take the case of Massachusetts resident Liz Fong-Jones, a 24-year-old MIT grad and Google alum. Ms. Fong-Jones shared her car through RelayRides. The driver was killed in a tragic accident, and 3 passengers were critically injured. Suddenly, $1 million may not be enough insurance. If the accident damages exceed that, who will be responsible? Probably not Ms. Fong-Jones’ insurer; personal auto policies exclude such behavior.

Will that leave Ms. Fong-Jones’ assets and future earnings vulnerable to lawsuit? That remains to be seen. But, it is another cautionary tale about using car share services. This is just the scenario we were worried about with our original posts 3 years ago.

If you have questions about insurance for renting a car for business or personal use, or would like to know more about how car sharing affects your Maine auto insurance, contact Noyes Hall & Allen at 207-799-5541.


Trusted Choice Insurance Agent Video Debuts in Portland, Maine

We’re enjoying this new Trusted Choice video, which highlights the advantage of using a local independent insurance agent. Not only will you get personalized advice from a local professional, but you have the option of choosing from among several insurance companies at once.

We are proud to be your Portland, Maine area Trusted Choice insurance agent. For answers to your insurance questions, contact Noyes Hall & Allen Insurance at 207.799.5541.


Remembering Leone G. “Lee” Allen, CPCU

Ten years ago, Lee Allen, one of the founders of Soule Allen Insurance, passed away. Lee was a true insurance pioneer, a trailblazer and role model for the many women business leaders who followed her. After Soule Allen was sold to Noyes & Chapman, and Blake, Hall & Sprague Insurance combined to form a new business, we chose to remember Lee’s great contributions to our business and our industry by continuing her name on the masthead.

Lee Allen remains an inspiration to those of us who knew her, and is fondly remembered by many clients, South Portland citizens, and insurance professionals throughout New England.

Here is a reprint of Lee’s obituary; a very brief list of the many acccomplishments of  a remarkable woman.


SO. PORTLAND – Leone G. ‘Lee’ Allen, 72, of Wescott Road, So.Portland, died Thursday, December 13, 2001 at her residence.She was born in Prentiss, Maine, a daughter of Laurence and Bernice Lindsay Averill.She attended Prentiss Schools and graduated in 1946 as an Honor Student from Bangor High School, and attended the University of Maine Evening School.
In 1961, she became the first woman in Maine to receive a Chartered Property Casualty Underwriter (CPCU) Designation.Mrs. Allen was the co-owner and Treasurer with William Soule of Soule Allen Insurance in So. Portland.
Mrs. Allen also received numerous awards including, ‘Insurance Woman of the Year’ in 1967; Governor’s Highway Safety Award in 1967 for Defensive Driving Activities, Maine Truck Owners Safety Award in 1970 for ‘Outstanding service in the Field of Highway Safety’, ‘New England Insurance Agent of the Year’ in 1979 for the contribution to the insurance industry and the community, ‘professional insurance Agents of Maine 1993 Agent of the Year’ which was for outstanding leadership and dedication to the insurance industry and the independent agency community.This year the Maine Chapter of CPCU 2001 Award was renamed in her honor, The Lee Allen Presidents Award for Excellence.
Mrs. Allen is survived by a sister Beverly Smart of Kennebunk, Maine, a brother Laurence Averill of West Palm Beach, Florida, several nieces and nephews; and her longtime business associate of 30 years, William R Soule of So. Portland.

Noyes Hall & Allen Insurance Facebook Fall Photo Contest Winners

To celebrate New England’s signature season, our Maine independent insurance agency held a Fall Facebook Photo Contest, which drew 29 beautiful photos. Noyes Hall & Allen’s 350 Facebook fans decided the winner by “liking” their favorites. First prize was a $100 U.S. Savings Bond; second prize was a $50 U.S. Savings Bond; and third prize was $10 cash.

First Place: Denis Hartley

Our contest winner, with an impressive 70 “likes” was Denis Hartley of South Portland. Denis actually had two photos with the same number of votes, so we’ve published both here. The first shows two ducks in a pond amid fall colors. The second features a view from Loon Mountain of foliage and a mountain lake.

two ducks in a fall pond. Photo by Denis Hartley Loon Mountain in fall by Denis Hartley

Second Place – Jessica Lang

The second-highest vote getting photo was taken by Jessica Lang. Jessica lives in New Hampshire, and her winning photo was taken in Penacook, NH. It captures the pure childhood joy of playing in fallen leaves, and features Jessica’s niece. Jessica says “she was trying to throw the leaves over her head, but she just couldn’t do it. She had a blast playing in the park and getting her picture taken.”

Playing in leaves Penacook NH by Jessica Lang

Third Place – Shawna Hall

Third place photographer was Shawna Hall of Durham, Maine. Shawna captured this beautiful foliate scene in Auburn, Maine. To see more of her work, visit Shawna Hall’s web site. Coincidentally, Shawna is a licensed insurance agent – just proving that insurance people can have a creative streak, too!

fall lake scene in Auburn, ME

Thanks again to the photographers who captured and shared such beautiful fall images, and to our Facebook fans who voted for them. We hope you enjoyed the contest as much as we did!

More Heating Assistance Winners!

Just as January brought sub-zero temperatures and higher oil prices to Southern Maine. 14 Noyes Hall & Allen clients were among the winners in the this month’s drawing of Concord Group’s A Warm Hand heat lottery. Combined with December’s drawing, Noyes Hall & Allen clients have received $2,600 worth of oil, gas or other heating fuel assistance, courtesy of Concord Group.

We know that many people struggle with paying winter heating bills. We have seen cases where using space heaters, wood stoves and other alternate heating methods have caused fires. We hope that this fuel assistance program will help to reduce these fires.

More good news! It’s not too late to sign up! Concord will draw more names on the 15th of February and March. If your homeowners policy was provided by Concord Group on October 31, you’re eligible. Sign up today!

Good luck!