Reviewed by AZ Insurance Agency, licensed in Texas, serving Houston since 2003.

Two houses on the same Katy street, hit by the same hailstorm, can get two wildly different checks from their insurance company. Same damage. Same roof. Same carrier, even. The difference comes down to a single code buried near the top of their policy — HO-A, HO-B, HO-3 — that most homeowners have never noticed and couldn't explain if you asked them.

That little code decides what's covered, how a claim gets paid, and whether you get a check for what your roof is worth today or what it cost when it was new. In Texas, the spread between the cheapest form and the right one can be tens of thousands of dollars at claim time. It's the kind of thing that's invisible right up until it's the only thing that matters.

At AZ Insurance Agency, we've been reading these declarations pages for Houston families since 2003, and we'll happily decode yours line by line at any of our 15 offices across Houston and Dallas. Here's the plain-English version of what those forms mean — and which one you actually want before storm season tests it.

Short answer: Texas homeowners policies come in "forms," ranked roughly weakest to strongest: HO-A (the most basic — named perils, often pays depreciated value), HO-B (the older broad Texas form), HO-3 (the national standard most homeowners should want — open-perils on your house, replacement cost commonly available), and HO-5 (the premium tier — open-perils on the house and your belongings). The biggest practical differences are named perils vs. open perils and actual cash value vs. replacement cost. You'll find which form you have on the top of your declarations page. If it says HO-A and you own a $400,000 home, it's worth a conversation.

Key Takeaways

• The form code controls your coverage. HO-A, HO-B, HO-3, and HO-5 are not interchangeable — they pay claims differently.

• "Named perils" is the trap. A basic policy only covers losses from causes specifically listed. If your cause isn't on the list, you're not covered.

• "Open perils" is what you want for your home — it covers everything except a short list of named exclusions. The burden flips in your favor.

• Actual Cash Value vs. Replacement Cost is the other big one. ACV pays you the depreciated value; RCV pays to actually replace it. HO-A often defaults to ACV.

• HO-3 is the sweet spot for most Houston homeowners. HO-5 is the upgrade if you want open-perils on your belongings too.

• Flood and windstorm are separate conversations no matter which form you have. None of these cover flood.

• AZ Insurance reviews your form free at any of our 15 offices and shops 8 carriers to get you the right one.

First, Where To Find Your Form

Before we get into what they mean, find out what you've got. Pull your declarations page — the one-page summary your carrier sends each year (it's usually the first page of your policy packet or the first thing in your insurer's online portal). Near the top, you'll see a policy form code: something like HO-A, HO-B, HOA, HO-3, or a company-specific name. That's your form. Everything below explains what it's quietly doing for you — or not. (If you've never given the rest of that page a real read, our home insurance walk-through is a good companion.)

The Two Ideas That Actually Matter

Forget the alphabet soup for a second. Almost every meaningful difference between these forms comes down to two questions.

1. Named perils vs. open perils

• Named perils: your policy lists the specific causes of loss it covers — fire, hail, theft, and so on. If your damage was caused by something not on the list, you're not covered. The burden is on you to fall inside the list.

• Open perils (also called "all-risk"): your policy covers every cause of loss except the ones it specifically excludes. The burden flips — the insurer has to point to an exclusion to deny you.

Open perils is meaningfully better, especially for weird, hard-to-categorize damage. That's the single biggest reason HO-3 beats HO-A.

2. Actual Cash Value vs. Replacement Cost

• Actual Cash Value (ACV): pays you what the item is worth today, after depreciation. Your 12-year-old roof gets valued like a 12-year-old roof — which after a hailstorm might be a fraction of what a new one costs.

• Replacement Cost Value (RCV): pays to actually replace the item with a new equivalent, no depreciation haircut.

A basic HO-A frequently defaults to ACV. The gap between a depreciated check and a replacement check is exactly where homeowners get blindsided — and it pairs badly with another Texas surprise, the percentage-based wind and hail deductible.

The Texas Forms, Weakest To Strongest

HO-A — the basic form

The most stripped-down option. Named perils on both your home and your belongings, and it commonly pays on an actual cash value basis. It's the cheapest premium, and for that reason it shows up a lot on older policies and budget shoppers. The catch: it covers the fewest causes of loss and pays the least when it does. On a higher-value Houston home, HO-A is usually a mismatch — you're insuring a big asset with a small umbrella.

HO-B — the old Texas broad form

For years, HO-B was the workhorse Texas homeowners policy. It's broader than HO-A — historically offering open-perils-style coverage on the dwelling and broader named perils on contents. If you've been with the same carrier for a long time, there's a real chance you're on an HO-B or a company form modeled on it. It's a solid policy, but the market has largely moved to national forms, and an HO-B should be compared against a modern HO-3 to make sure you're not leaving coverage or replacement-cost provisions on the table.

HO-3 — the national standard (what most people should want)

HO-3 is the most common homeowners form in the country, and for good reason. It gives you open perils on your dwelling — your house is covered against everything except the named exclusions — and named perils on your contents, with replacement cost widely available as the default or a cheap add-on. For the vast majority of Houston homeowners, this is the right baseline. If someone hands you an HO-A quote and an HO-3 quote, the HO-3 is almost always the smarter buy even at a slightly higher premium. It's the kind of "boring but right" coverage we talk through in how to stay out of the home-insurance doghouse.

HO-5 — the premium upgrade

HO-5 takes the open-perils treatment and extends it to your belongings too. So both your home and your stuff are covered on an all-risk basis, usually with replacement cost across the board and higher built-in limits for things like jewelry and electronics. It costs more. For a well-appointed home, or anyone who wants the fewest possible claim-time arguments, it's worth pricing out. (Building something other than a standard stick-built house? Prefab and manufactured homes have their own rules.)

A Quick Way To Picture It

(Exact terms vary by carrier and endorsements — this is the shape of it, not the fine print. Your declarations page and policy language control.)

What None of Them Cover

No matter which form you have, two of Houston's biggest risks live outside the standard homeowners policy:

• Flood — rising water is always excluded from homeowners coverage and needs a separate flood policy. This catches people every single hurricane season. We covered the full version in does homeowners insurance cover flood in Texas and the 2026 update on NFIP vs. private flood options. Renting instead of owning? The same exclusion applies — see does renters insurance cover flood in Houston.

• Windstorm/hail along the coast — in some coastal areas this is excluded and handled separately (TWIA). In most of the Houston metro it's included, but with that percentage-based deductible worth understanding before you file — and before the next hurricane season tests it.

Knowing your form is step one. Knowing what sits outside it is step two — and that's where a lot of "I thought I was covered" stories begin.

Frequently Asked Questions

Q: What's the difference between HO-A, HO-B, and HO-3 in Texas?

They're different homeowners policy "forms" that pay claims differently. HO-A is the most basic — named perils only, often paying actual cash value (depreciated). HO-B is the older, broader Texas form. HO-3 is the national standard, giving you open-perils coverage on your home and replacement cost commonly available. Stronger form, broader protection.

Q: Which homeowners policy form is best for most Texas homeowners?

For most people, HO-3 is the right baseline — open perils on the dwelling plus replacement cost. HO-5 is the upgrade if you also want open-perils, replacement-cost coverage on your belongings. HO-A is usually a mismatch for a higher-value home because it covers the least and often pays depreciated value.

Q: How do I find out which policy form I have?

Look at the top of your declarations page — the annual summary your insurer sends. You'll see a form code like HO-A, HO-B, or HO-3 near your name and policy number. If you can't find it or aren't sure what it means, bring the page to any AZ Insurance office and we'll decode it for free.

Q: What does "named perils" vs. "open perils" mean?

Named perils means your policy only covers causes of loss specifically listed in it — if your cause isn't on the list, you're not covered. Open perils (or "all-risk") covers every cause except the ones specifically excluded, which shifts the burden onto the insurer to prove an exclusion applies. Open perils is the stronger protection.

Q: Does any homeowners form cover flood?

No. Flood — rising water from outside — is excluded from every homeowners form, HO-A through HO-5. You need a separate flood policy through NFIP or a private carrier. It's a common and costly surprise for Houston homeowners every hurricane season.

Q: Is an HO-A policy bad?

Not "bad," but it's the most limited. It covers the fewest causes of loss and often pays actual cash value instead of replacement cost. On an older, lower-value home it can make sense; on a $300K–$500K Houston home it usually leaves a dangerous gap. It's worth comparing against an HO-3 before you renew.

The Move: Get Your Form Read Before The Next Storm

If you've read this far and you're not 100% sure which form you have, that uncertainty is the action item. Pull your declarations page, find the code, and if it's an HO-A — or you just don't know — bring it to us.

A coverage review at AZ Insurance is free, takes a few minutes, and we'll tell you in plain language: here's the form you have, here's what it pays, here's what it'd cost to move up to the coverage that actually fits your home. We shop 8 carriers so the upgrade doesn't have to mean an ugly premium jump, and our agents are bilingual at all 15 offices.

Walk into any AZ Insurance office, or get a free quote. Storm season doesn't care which form you have. You should.

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• Does Homeowners Insurance Cover Flood in Texas?

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• NFIP Changes in 2026: Houston's Flood Insurance Options