An HO-7 policy, also known as an MH3 policy, mobile home insurance or manufactured home insurance, is a type of homeowners insurance that covers single-wide, double-wide, and triple-wide mobile homes on an open perils basis. That means your dwelling is insured for every event except those the policy lists as exclusions.
Belongings are insured on a named-perils basis (meaning they’re covered only for events the policy lists) for their replacement cost.
What does an HO-7 policy cover?
Like an HO-3 policy, an HO-7 policy covers your dwelling, belongings, other structures, loss of use, personal liability, and medical payments to guests. That means an HO-7 policy can help pay for:
- Damage to your mobile home.
- Damage to detached structures on your property, like sheds or garages.
- Damage to or theft of your personal belongings.
- A place to stay if a covered claim keeps you from living at home during repairs.
- Legal expenses if someone sues you for damaging their property or causing their injuries.
- Immediate medical care if someone is injured while visiting your home.
While some policies only offer actual cash value coverage and pay out the depreciated value of your home or belongings, the HO-7 policy offers replacement cost coverage for your home, other structures, and personal property. In other words, it covers what it really costs to replace your home after a total loss or to buy similar, new belongings to replace your damaged ones.
HO-7 offers open perils coverage for your home and other structures
The HO-7 is an open perils (or all risk) policy. That means it covers your dwelling and other structures for all sources of loss or damage except those the policy lists as exclusions (we’ll get to those in a bit, but there are typically 20 exclusions). Nearly any loss scenario you can think of is covered: fire, burst pipes, theft, vandalism, hail, windstorms, etc.
HO-7 offers named perils coverage for your belongings
The HO-7 policy covers your personal property a little differently. This is covered on a “named perils” basis, meaning it covers losses only from events listed in the policy. Typically, your property is insured against these 16 named perils:
- Fire or lightning
- Windstorm or hail
- Explosion
- Aircraft
- Riot or civil commotion
- Smoke
- Vehicles
- Vandalism
- Theft
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or stream
- Freezing
- Volcanic eruption
- Sudden, accidental tearing apart, cracking, or burning or a built-in appliance such as a water heater or an oven
- Sudden and accidental damage from a generated electrical current
If an event isn’t on this list, your personal property isn’t covered for it (unless you add an endorsement).
HO-7 coverage in action
That was a lot of information to throw at you, so let’s review a bit.
Say a big windstorm sends a tree through your roof and creates a gaping hole over your living room. Rain gets in and now your books and floor are soaked. How would HO-7 insurance handle it?
Windstorms are covered both in open- and named-perils policies, so your HO-7 policy may repair your roof and the floors, and cover the cost to replace your beloved books.
What an HO-7 policy doesn’t cover
Because an HO-7 policy is an open-perils policy, it covers all events except those listed as exclusions. These are the 20 typical excluded events:
- Ordinance or law
- Earth movement, like floods, mudslides, and sinkholes
- Backup of sewer or drain
- Power failure
- Neglect
- War
- Nuclear hazard
- Intentional loss
- Government action
- Theft to a dwelling under construction
- Vandalism of long-term vacant property
- Mold, fungus, or rot
- Wear and tear
- Mechanical breakdown
- Smog, rust, or corrosion
- Smoke from industrial operations or agricultural smudging
- Discharge, dispersal, or seepage of pollutants
- Settling, shrinking, bulging, or expanding of structure such as foundation
- Birds, vermin, rodents, insects
- Animals you own
You can add on coverage for some of these exclusions – like flood insurance – to address potential gaps.
