HO-B vs HO-3 Home Insurance
HO-B was an older policy form. HO-3 replaced it and is now the standard policy most homeowners buy today.
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Why you're seeing HO-B at all
If a quote or an old document mentions HO-B, it's likely a naming leftover or a mislabeled form, since HO-B isn't something insurers write anymore. What matters for closing is the policy you're actually being offered now, which for most buyers of a standard single-family home is HO-3. That form covers the house itself against any cause of damage except ones specifically excluded, like flood or earthquake, and covers your belongings against a shorter, named list of causes. Check the declarations page of whatever quote you have, it will say HO-3 if that's what you're getting. Your lender just needs proof of a policy meeting their coverage minimum in place by closing, and an HO-3 binder satisfies that in nearly every case.
What varies between HO-3 quotes isn't the coverage type, it's the dwelling amount, the deductible, and the price, and those differences can be large for the same house. One quote might set the rebuilding cost too low to cover a full loss. Another might charge more without adding protection. Before sending a binder to the lender, it's worth checking that the dwelling amount matches what the house would actually cost to rebuild.
What to check on the HO-3 quote before it becomes your binder
The dwelling coverage number is the one to look at first. It should reflect what it would cost to rebuild the house from the ground up, materials and labor included, not what you paid for it or what it would sell for. A house in a desirable neighborhood can have a purchase price well above its rebuild cost, or a smaller older home can cost more to rebuild than its sale price suggests given current construction prices. Most quote tools estimate this from the home's size, age, and construction details. If the number looks off, it can usually be adjusted before you bind.
The deductible is the other number that changes what you pay and what you'd owe out of pocket after a claim. A higher deductible lowers the premium, a lower one raises it. Some policies in certain states carry a separate, higher deductible specifically for wind or hail damage, often written as a percentage of the dwelling coverage rather than a flat dollar amount. If your quote includes one, it's worth working out what that percentage comes to in actual dollars, since a 2% deductible on a $400,000 dwelling limit is $8,000, not a small difference from a flat $1,000 deductible.
Ask what the quote assumes about personal property and liability too. HO-3 policies include coverage for belongings and for liability if someone is hurt on the property, usually set as a percentage of the dwelling amount or a separate flat figure. These are typically set at reasonable defaults, but if you have higher-value belongings or want more liability protection, those limits can usually be raised before the policy is bound.
Once the dwelling amount, deductible, and other limits look right, what's left is confirming the lender's specific requirement, usually a minimum dwelling coverage figure tied to the loan amount, and making sure the binder lists their name correctly as mortgagee. The declarations page is where all of this is spelled out, and it's worth reading in full before closing rather than after.
What else the lender will ask for besides the binder
A binder alone sometimes isn't the full package. Many lenders want the paid receipt or proof the first year's premium is handled, either paid upfront or set up through escrow, where the lender collects a portion of it monthly along with the mortgage payment and pays the insurer directly when it's due. If your closing documents mention an escrow account for insurance, that's what it means, and it's normal. It doesn't change your coverage, only how the premium gets paid.
The lender will also want to be listed correctly on the policy itself, usually as mortgagee or sometimes additional insured, along with the loan number. This matters more than it sounds like it should. If the name or loan number doesn't match what the lender has on file, the binder can bounce back as unacceptable days before closing, which is the kind of delay nobody wants to discover at the last minute. Double-checking that the declarations page lists the lender's information exactly as given on the loan documents is worth the five minutes it takes.
Some lenders also set a minimum dwelling coverage figure tied to the loan amount rather than the home's rebuild cost, and the two numbers aren't always the same. A house with a $350,000 loan might have a rebuild cost of $420,000, and the lender's minimum is usually the lower of the two figures, not a separate requirement stacked on top. If a quote's dwelling amount looks like it was set to match the loan rather than the rebuild estimate, it's worth asking whether that's actually enough coverage for the house, since being underinsured for a full loss is a separate problem from satisfying the lender.
Timing is its own issue. Most binders are valid for a set number of days, often 30 to 90 depending on the insurer, and if closing gets pushed back past that window, the binder may need to be reissued or extended. It's worth asking when the binder expires relative to the expected closing date, rather than assuming it will still be valid if the schedule slips.
Before you send anything to the lender
Open the declarations page one more time. Make sure the dwelling amount matches the rebuild cost, not the purchase price, and that the lender's name and loan number are spelled exactly as given on your loan documents.
