What Is An HO-8 Form?
The HO-8 form is one of six different forms used for homeowners policies. Its liability coverage (Coverages E and F) is similar to the other five forms, but its property coverage (specifically Coverages A, B, and C) is different. Form HO-8 applies to the special situation when a house is older or has significantly depreciated in value. In those cases, a homeowner can use Form HO-8 to insure the house for its actual value or repair costs, rather than its replacement cost. This makes sense (and significantly lowers the premium amount) because an older home's actual value (its market value or reasonable sale price) is considerably less than its replacement cost (the amount needed to rebuild it with the same materials). Form HO-8 is different from the other house-oriented forms ( HO-1 , HO-2 , and HO-3 ) because those forms require that homeowners insure their homes for at least 80 percent of replacement value. The HO-8 form is not available for apartments, condominiums, or cooperatives.
Example(s): For instance, Hal lives in one of Bedford Falls's older homes. His home is valued at $120,000, but would cost $250,000 to rebuild if it burnt to the ground. If he insures it using Forms HO-2 or HO-3, he will need to purchase at least $200,000 worth of homeowners coverage to meet the 80 percent requirement. If he insures it using Form HO-8, however, he will need to purchase only $120,000 worth of coverage and wind up paying a significantly lower premium.
The form number of your particular policy will usually be shown on the bottom right corner of every page. Use this resource as a learning tool, but always read your policy carefully to familiarize yourself with the details of your coverage.
Dwelling and Other Structures
The HO-8 form provides coverage for 11 named perils:
- Fire or lightning
- Windstorm or hail
- Riot or civil disturbance
- Vehicles (as long as they're operated by nonresidents)
- Smoke (not including smoke from fireplaces)
- Vandalism or malicious mischief
- Broken glass (up to a $100 limit)
- Volcanic eruption
These perils are considered "basic" because all six homeowners policy forms provide at least a minimum coverage for these 11 perils. Most of the other forms provide more than basic coverage.
In the HO-8 form, personal property is also covered on a basic perils basis. If you're covered under an HO-8 policy, you can collect on your homeowners insurance for damage to your dwelling, other structures, and personal property that is caused by any of the 11 basic perils.
If your homeowners policy is written on Form HO-8, you are not covered by property insurance for damage or destruction caused by:
- Enforcement of building codes and similar laws
- Power failures
- Neglect (meaning your failure to take reasonable steps to protect your property)
- Nuclear hazard
- Intentional acts
The impact of these exclusions on your coverage can be easily seen:
Coverage under Form HO-8
Column A You're Covered for Damage Caused By
Column B You're Not Covered for Damage Caused By
Fire or lightning Windstorm or hail Explosion Riot or civil disturbance Aircraft Vehicles Smoke Vandalism or malicious mischief Theft Broken glass Volcanic eruption
Enforcement of building codes and similar laws Earthquakes Flooding Power failures Neglect War Nuclear hazard Intentional acts Any peril or cause not included in Column A
One of the Conditions in Section I of Form HO-8 describes the amounts you will receive for any losses covered by property insurance. Separate amounts are set for Coverages A (Dwelling) and B (Other Structures), and Coverage C (Personal Property), as follows:
- For your dwelling and other buildings, there are two possible scenarios. If you repair or replace the property within 180 days, you are entitled to receive the full replacement cost or the amount spent to repair the property. Otherwise, you are entitled to receive the lesser of the property's market value or repair or replacement cost minus depreciation.
- For your personal property (including appliances, carpeting, and structures other than buildings), you are entitled to receive the actual cash value of any damaged personal property but no greater than the repair or replacement cost of the property.
Tip: Loss settlement is always subject to the coverage limits described on the Declarations Page of your policy. This means you are never entitled to receive more than the coverage limit, even in cases where the actual cash value or replacement cost is a greater amount, unless you have increased your coverage limit by endorsement.
Caution: To qualify for payment from your insurance company, you must meet the conditions that are spelled out in your homeowners policy. Some conditions dictate your responsibilities before a loss occurs, and some dictate the actions you must take after loss to remain eligible for coverage. Read your policy carefully to familiarize yourself with your responsibilities under the policy.
As noted, Form HO-8 has a few unique features because it's designed for the special situation presented by older homes. Here are a few other features found in HO-8 that are not shared by all the other forms:
- Off-Premises Personal Property. Whereas the other five forms cover your personal property while it is anywhere in the world up to your full Coverage C limit, Form HO-8 covers your personal property when it is away from your dwelling only up to 10 percent of your Coverage C limit or $1,000, whichever is greater.
- Theft. Form HO-8 has much more restrictive provisions regarding theft than any of the other forms. Unlike the other forms, theft coverage is limited to $1,000, and only applies to theft from your home, a bank, or a public warehouse.
- Broken Glass. Unlike most of the other policy forms, Form HO-8 sets a $100 limit for payment for broken glass or damage caused by broken glass.
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