The HO (Homeowner) policy types HO-1, HO-2, HO-3, HO-4, HO-5, HO-6 and HO-8 are typically
written on owner-occupied, one or two family dwellings and used primarily for residential purpose.
These policies mirror the dwelling policies with respect to the numbering system as well as their
accompanying names. However, there are several distinctions in the perils insured against and the
coverage amounts. Unlike the dwelling policies previously discussed, the homeowners policies require
higher amounts of insurance to be carried. Also, Coverages B-Other Structures, C-Personal Property
and D- Additional Living Expenses are NOT optional.
HO-1, HO-2 AN
HO-3 PROPERTY COVERAGES
A-Dwelling Determined by Insurance Company
B-Other Structures (Apartment Structures) 10% of A – Dwelling
C- Personal Property (Contents) 70% of A – Dwelling
D-Additional Living Expenses (Loss of Use) 30% of A – Dwelling
Once the dwelling amount is determined, the amounts for the other coverages will be based on a percentage
of that amount. For example, the replacement cost of the dwelling is $100,000. The standard formula used
to determine the other amount is:
10% of the dwelling amount for the Other Structures
50% of the dwelling amount for the Personal Property
20% of the dwelling amount for the Additional Living Expenses
or
A-Dwelling $100,000
B-Other Structures (Appurtenant Structures) $10,000
C-Personal Property (Contents) $70,000
D-Additional Living Expenses (Loss of Use) $30,000
Note: Each coverage amount is in addition to the dwelling amount. The total amount of insurance in the
above example is $180,000. Additional amounts on each of these coverages can be purchased to suit the
needs of the insured.
The HO-1 insures for direct loss to
Coverages A, B and C on a named peril basis. The loss must fall within the definitions of one of these
perils. The following 10 perils are insured against:
1. Fire and Lighting
2. Windstorm and Hail – this peril does not include loss to the property contained in a building
caused by rain, snow, sleet, sand or dust unless the direct force of wind or hail damages the
building, causing an opening in a roof or wall and the rain, snow sleet, sand or dust enters
through this opening. This peril includes loss to watercraft and their trailers, furnishings,
equipment and outboard engines or motors, only while inside a fully enclosed building
3. Explosion
4. Riot or Civil Commotion
5. Aircraft
6. Vehicles—not including vehicles driven by the insured
7. Smoke
8. Vandalism or Malicious Mischief
9. Theft
10. Falling objects – this peril does not include loss to the inside of a building or property
contained the building unless the roof or an outside wall of the building is first damaged by a
falling object. Damage to the falling object itself is not included.
The HO-2 insures for direct physical loss
to Coverages A, B and C on a named peril basis. The loss must fall within the definitions of these perils.
The HO-2 includes the first 10 perils listed in the HO-1 Policy above and adds to the following perils:
11. Weight of Ice, Snow or Sleet - that causes damage to a building or property contained in the
building.
12. Accidental Discharge or Overflow or Water or Steam - from within a plumbing, heating, air
conditioning or automatic fire protective sprinkler system or from within a household
appliance.
13. Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water
heating system, an air conditioning or automatic fire protective sprinkler system, or an
appliance for heating water. This peril does not include loss:
a. on the “residence premises” if the dwelling as been vacant for more than 30 consecutive days immediately before the loss (A dwelling being constructed is not vacant.)
b. to the system or appliance from which the water or steam escaped
c. caused by or resulting from freezing except as provided in the peril of freezing below
d. on the “residence premises” caused by accidental discharge or overflow which occurs off the
“residence premises”
e. in this peril a plumbing system does not include a sump, sump pump or related equipment
14. Freezing of plumbing,- heating, air conditioning or automatic fire protective sprinkler system or
of a household appliance. This peril does not include loss on the “residence premises” while
the dwelling is vacant, unoccupied or being constructed, unless the insured has used
reasonable care to:
a. maintain heat in the building
b. shut off the water supply and drained the system and appliance of water
15. Sudden and Accidental Damage from Artificially Generated Electrical Current – this peril does
not include loss to a tube, transistor or similar electronic component.
16. Volcanic Eruption – other than loss caused by earthquake, land shock waves or tremors.
HO-3 SPECIAL FORM – OPEN
PERILS –ALL RISK
The homeowners HO-3 special form
insures for direct physical loss to Coverages A – Dwelling and B – Other Structures on an “open peril”
basis. In short, if the loss is not specifically excluded, it is covered. Please take note that Coverage C –
Personal Property is not covered on an “open perils” basis, rather is it covered on a named peril basis.
The insurance policy provides a list of definitions for words and phrases used throughout the policy.
In this policy, “you” and “your” refer to the “named insured” shown in the Declarations and the
spouse, if a resident of the same household. “We, “us” and “our” refer to the insurance company
providing this insurance.
1. “Bodily Injury” – means bodily harm, sickness or diease including required care, loss of services and
death that results
2. “Business” – includes trade, profession or occupation.
3. “Insured” – means you and residents of your household who are:
a. your relatives
b. other persons under age of 21 and in the care of any person named above under Section II
c. with respect to animals or watercraft to which this policy applies, any person or organization legally
responsible for these animals or watercraft, which are owned by you or any person, included in 3.a or
3.b above. A person or organization using or having custody of these animals or watercraft in the
course of any “business” or without consent of the owner is not an “insured”.
d. with respect to any vehicle to which this policy applies:
(i) persons while engaged in your employ or that any person included in 3.a or above
(ii) other persons using the vehicle on an “insured location” with your consent
4. “Insured Location” –means:
a. the “residence premises”
b. the part of other premises, other structures and grounds used by you as a residence and:
(i) which is shown in the Declarations
(ii) which is acquired by you during the policy period for your use as a residence
c. any premises used by you in connection with a premises in 4.a and 4.b above
d. any part of a premises:
(i) not owned by an “insured”
(ii) where an “insured” is temporarily residing
e. vacant land, other than farm land owned by or rented to an “insured”
f. land owned by or rented to an “insured” on which a one or two family dwelling is being built as a
residence for an “insured”
g. individuals or family cemetery plots or burial vaults of an “insured”
h. any part of a premises occasionally rented to an “insured” for other then “business” use
5. “Occurrence” –means an accident including continuous or repeated exposure to substantially the same
general harmful conditions which results during the policy period in:
a. “Bodily Injury”
b. “Property Damage”
6. “Property Damage” – means physical injury to, destruction of or loss of use of tangible property.
7. “Residence Employee” means:
a. an employee of an “insured” whose duties are related to the maintenance or use of the “residence
premises”, including household or domestic services
b. one who performs similar duties elsewhere not related to the “business” of an “insured”
8. “Residence Premises” – means:
a. the one family dwelling, other structures and grounds, or
b. that part of any other building where you reside and which is shown as the “residence premises” in the Declarations
c. a two family dwelling where you reside in at least one of the family units and which is shown as the “residence premises” in the Declaration
1. The dwelling on the “residence premises” shown in the Declarations Page including structures
attached to the dwelling
2. Materials and supplies located on or next to the “residence premises” used to construct, alter or
repair the dwelling or other structures on the “residence premises”
3. This coverage does not apply to land including land on which the dwelling is located
COVERAGE B—OTHER STRUCTURES –“WE” COVER:
1. Other structures on the “residence premises” set apart from the dwelling by a clear space including structures connected to the dwelling by only a fence, utility line or similar connection
2. This coverage does not apply to land including land on which the other structures are located
3. We do not cover other structures:
(a) used in whole or in part for “business”
(b) rented or held for rental to any person not a tenant of the dwelling unless used solely as a private garage
4. The limit of liability for this coverage will not be more than 10% of the limit of liability that
applies to Coverage A. Use of this coverage does not reduce the Coverage A limit of liability
COVERAGE C—PERSONAL PROPERTY -- “WE” COVER – personal property owned or used
by an “insured” while it is anywhere in the world. At the “insured’s” request, “we” will cover personal
property owned by:
1. Others while the property in on the part of the “residence premises” occupied by an “insured”
2. A guest or a “residence employee” while the property is in any residence occupied by an
“insured”
“Our” limit of liability for personal property usually located at an “insured’s” residence other than the
“residence premises” is 10% of the limit of liability for Coverage C or $1000, whichever is greater.
Personal property moved to a newly acquired residence is not subject to this limitation for the 30 days from
the time you begin to move the property.
These limits do not increase the Coverage C limit of liability. The special limit for each numbered
category below is the total limit for each loss for all property in that category.
1. $200 on money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum,
coins and medals.
2. $1000 on securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes,
Manuscripts, personal records, passports, tickets and stamps. This dollar limit applies to these categories
regardless of the medium such as paper or computer software on which the material exists. This limit
includes the cost of research, replacing or restoring the information from the lost or damaged material.
3. $1000 on watercraft including their trailers, furnishings, equipment, outboard engines or motors.
4. $1000 on trailers not used with watercraft
5. $1000 for loss by theft of jewelry, watches, furs, precious and semi-precious stones.
6. $2000 for loss by theft of firearms.
7. $2500 for loss by theft of silverware, silver-plated ware, goldware, gold-plated ware and pewterware.
This includes flatware, hollowware, tea sets, trays and trophies made of or including silver, gold or
pewter.
8. $2500 on property on the “residence premises” used at any time or in any manner for any “business” purpose.
9. $250 on property away from the “residence premises” used at any time or in any manner for any
“business” purpose. However, this limit does not apply to loss to adaptable electronic apparatus as
described in Special Limits 10 and 11 below.
10. $1000 for loss to electronic apparatus while in or upon a motor vehicle or other motorized land
conveyance if the electronic apparatus is equipped to be operated by power from the electrical system
of the vehicle or conveyance while retaining its capability of being operated by other sources of
power.
Electronic apparatus includes:
a. accessories or antennas
b. tapes, wires, records, discs or other media for use with any electronic described in item 10.
11. $1000 for loss to electronic apparatus while not in or upon a motor vehicle or other motorized
conveyance if the apparatus:
a. is equipped to be operated by power from the electrical system of the vehicle or conveyance while retaining the capability of being operated by other sources of power
b. is away from the “residence premises”
c. is used at any time or in any manner for any “business” purpose
d. electronic apparatus includes:
(i) accessories and antennas
(ii) tapes, wires, records, discs or other media used for use with any electronic apparatus described in item 11
1. Articles separately described and specifically insured in this or other insurance.
2. Animals, birds or fish.
3. Motor vehicles or all other motorized land conveyances. This includes:
a. equipment and accessories
b. electronic apparatus that is designed to be operated solely by use of the power from the electrical system of motor vehicles or all other motorized land conveyances. Electronic apparatus includes:
(i) accessories and antennas
(ii) tapes, wire, records, discs or other media used with any electronic apparatus.
c. the exclusion of property described in 3.a and 3.b above applies only while the property is in or upon the vehicle or conveyance
d. “We” do not cover vehicles or conveyances not subject to motor vehicle registration which are:
(i) used to service an “insured’s” residence
(ii) designed for assisting the handicapped
4. Aircraft and parts –means any contrivance used or designed for flight except model or hobby aircraft
not used or designed to carry or cargo.
5. Property of roomers, boarders and other tenants except property of roomers and boarders related to
an “insured”.
6. Property in an apartment regularly rented or held for rental to others by an “insured” except as
provided for in Additional Coverages.
7. Property rented or held for rental to others off the “residence premises”.
8. “Business” data including such data stored in:
a. books of account, drawings or other paper records
b. electronic data processing tapes, wires, records, discs or other software media. However, “we” do not cover the cost of blank recording or storage media and of pre-recorded computer programs available on the retail market
9. Credit Cards or fund transfer card except as provided in Additional Coverage
COVERAGE D– LOSS OF USE– the limit of liability for Coverage D is the total limit for all the
Coverages that follow:
1. If a loss covered under this section makes that part of the “residence premises” where “you”
reside not fit to live in, “we” cover:
a. the additional living expenses, meaning any necessary increase in living expenses incurred by
“you” so that “your” household can maintain its normal standard of living
b. payment will be for the shortest time required to repair or replace the damage or, if “you”
permanently relocate, the shortest time require for “your” household to settle elsewhere
2. If a loss covered under this section makes that part of the part of the “residence premises” rented to
others or
held for rental by “you” not fit to live in, “we” cover:
a. the Fair Rental Value, meaning the fair rental value of that part of the “residence premises”
rented to others or held for rental by “you” less any expenses that do not continue while the premises is not fit to live in
b. payment will be for the shortest time required to repair or replace that part of the premises rented or held for rental
3. If a civil authority prohibits you from use of the “residence premises” as a result of direct damage
to neighboring premises by a peril insured against in the policy, “we” cover the Additional Living
Expense and Fair Rental Value loss as provided under 1 and 2 above for no more than two weeks.
4. The periods of time under 1,2 and 3 above are not limited to expiration of this policy.
5. “We” do not cover loss or expense due to cancellation of a lease or agreement.
ADDITIONAL COVERAGES
The additional coverages provide for incidental costs usually associated with a covered loss.
Additional Coverage 8, Collapse is made part of the HO-1 Basic Form Policy.
DEBRIS REMOVAL --“we” will pay “your” reasonable expense for the removal of:
1. Debris of covered property if a peril insured against that applies to the damaged property causes the
loss, or
2. Ash, dust or particles from a volcanic eruption that has caused direct loss to a building or property
contained in a building
3. This expense is included in the limit of liability that applies to the damaged property if the amount
to
be paid for the actual damage to the property plus the debris removal expense is more than the limit
of
liability for the damage property. An additional 5% of that limit of liability is available for debris
removal expense.
4. “We” will also pay your reasonable expense up to $500 for the removal from the “residence
premises” of:
a. tree(s) felled by the peril of windstorm or hail
b. tree(s) felled by the peril of weight of ice, snow or sleet
c. a neighbor’s tree(s) felled by a peril insured against under Coverage C, provided the tree(s) damages a covered structure
d. The $500 limit is the most “we” will pay in any one loss regardless of the number of fallen trees
REASONABLE REPAIRS –in the event that covered property is damaged by an applicable peril
insured against, “we” will pay the reasonable cost incurred by “you” for necessary measures taken solely to
protect against further damage. If the measures taken involve repair to other damaged property, “we” will
pay
for those measures only if that property is covered under this policy and the damaged to that property is
caused
by an applicable peril insured against. This coverage:
1. Does not increase the limit of liability that applies to the covered property
2. Does not relieve “you” of “your” duties in case of a loss to covered property as set forth in Section
1
TREES, SHURBS AND OTHER PLANTS –“we” cover trees, shrubs, plants or lawns on the
“residence premises” for loss caused by the following perils insured against:
1. Fire or Lighting
2. Explosion
3. Riot or Civil Commotion
4. Aircraft
5. Vehicles not owed or operated by a “resident premises”
6. Vandalism or malicious Mischief
7. Theft
8. “We” will pay up to 5% of the limit of liability that applies to the dwelling for all trees, shrubs,
plants
or lawns. No more that $500 of this limit we be available for any one tree, shrub or plant. “We: do
not cover property grown for “business” purposes. This coverage is an additional insurance.
FIRE DEPARTMENT SEVICE CHARGE –“We” will pay up to $500 for “your liability assumed
by contract or agreement for fire department charges incurred when the fire department is called to save or
protect covered property from a peril insured against. “We” do not cover fire department service changes
the property is located within the limits of the city, municipality or protection district furnishing the fire
department response. This coverage is an additional insurance.
No deductible applies to this coverage.
PROPERTY REMOVED – “we” insure covered property against direct loss from any cause while
being removed from premises endangered by a peril insured against and for no more than 30 days while
removed. This coverage does not change the limit of liability that applies to the property being removed.
CREDIT CARD, FUND TRANSFER CARD, PROGERY AND COUNTERGEUT MONEY –
“we”
will pay up to $500 for:
1. The legal obligation of an “insured” to pay because of the theft or unauthorized use of credit cards
issued to or registered in an “insured’s” name
2. Loss resulting from theft or unauthorized use of a fund transfer cared used for deposit, withdrawal
or
transfer of funds issued to or registered to an “insured’s” name
3. Loss to an “insured” through acceptance in good faith of counterfeit United States or Canadian
paper
Currency
4. “We” do not cover use of a credit card or fund transfer card:
a. by a resident of “your” household
b. by a person who has been entrusted with either type of card
c. if an “insured” has not complied with all terms and conditions under which the cards are issued
5. all loss resulting from a series of acts of committed by any one person or in which any one person
is
concerned or implicated is considered to be one loss
6. “We” do not cover loss arising out of “business” use or dishonesty of an “insured”
7. Loss to an “insured” caused by forgery or alteration of any check or negotiable instrument
8. This coverage is an additional insurance. No deductible applies to this coverage.
LOSS ASSESSMENT –“we” will pay up to $1000 for “your” share of loss assessment charged
during
the policy against you by a corporation or association of property owners when the assessment is made
as a result of direct loss to the property owned by all members collectively. The loss must be caused by a
peril insured against under
Coverage A –Dwelling other than earthquake or land shock waves or tremors
before, during or after a volcanic eruption. This coverage applies only to the loss assessments charged
against you as owner or tenant of the “residence premises”. “We” do not cover loss assessments charged
against you or a corporation or association of property owners by any governmental body. The limit of
$1000 is the most “we” will pay with respect to any one loss regardless of the number of assessments.
COLLAPSE –“we” insure for direct physical loss to covered property involving collapse of a
building or any part of a building caused only by one or more of the following:
1. Perils insured against in Coverage C-Personal Property. These perils apply to covered buildings and
personal property for loss insured against by this additional coverage.
2. Hidden decay
3. Hidden insect or vermin damage
4. Weight of contents, equipment, animals or people
5. Weight of rain which collects on a roof
6. Use of defective material or methods in construction, remodeling or renovation if the collapse
occurs during the course of the construction, remodeling or renovation
7. Loss to an awning, fence patio, pavement, swimming pool, underground pipe, flue, drain, cesspool,
septic tank, foundation, retaining wall, bulkhead, prier, wharf or dock is not included under items
b, c, d, e and f unless the loss is a direct result of the collapse of a building
8. Collapse does not include settling, cracking, shrinking, bulging or expansion.
9. This coverage does not increase the limit of liability applying to the damaged covered
property.
GLASS OR SAFTEY GLAZING MATERIAL –“we” cover:
1. The breakage of glass or safety glazing material which is part of a covered building, storm door or
storm window
2. For the breakage, caused directly by earth movement, of glass or safety glazing material which is
part of a covered building, storm door or storm window
3. Loss to glass covered under this additional coverage (5.4i) will be settled on the basis of
replacement with safety glazing materials when required by ordinance or law. The HO-1 provides
up to $100 for this coverage.
4. This coverage does not increase the limit of liability that applies to the damaged property.
Landlord’s Furnishing – we will pay up to $2500 for “your” appliances, carpeting and other
household furnishing in an apartment on the “residence premises” regularly rented or held for rental to
others by an “insured” for loss only caused by all perils covered under HO-2 Broad Form except for the
peril of theft.
Under the HO-1 and HO-2 named peril policies, any limitations or exclusions are part of the perils
definition. Also, these policies have the General Exclusions Section that is standard to most dwelling and
homeowner’s policies. Since the HO-3 Special Form policy provides coverage on an open peril basis, there
was a need to include an additional set of exclusions. These exclusions are aimed at controlling claimed
losses due to gradual or repeated occurrences.
The HO-3 excludes loss caused by any of the following:
1. Wear and tear, marring or deterioration
2. Inherent vice, latent defect or mechanical breakdown
3. Smog, rust or other corrosion, mold, wet or dry
4. Smoke from agricultural smudging or industrial operations
5. discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge,
dispersal, seepage, migration, release or escape is itself caused by a peril insured against under
Coverage C of this policy (Pollutants means any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste
includes materials to be recycled, reconditioned or reclaimed.)
6. Settling, shrinking, building or expansion including resultant cracking of pavements, patios,
Foundation, walls, floors, roof or ceiling
7. Birds, vermin, rodents or insets
8. Animals owned or kept by an “insured”
9. If any of these cause water damage not otherwise excluded from a plumbing, heating, air
conditioning or automatic fire protective sprinkler system or household appliance, “we” cover the
loss causing by water including the cost of tearing out of tearing out and replacing any part of a
building necessary to repair the system or appliance. “We” do not cover the loss to the system or
appliance from which this water escaped.
10. Any of the exclusions found in the General Exclusions Section
11. Any ensuing loss, caused by 1 through 8 above to property described in Coverages A and B not
excluded or excepted in he policy, is covered.
CONDITIONS
The conditions of the HO policies are virtually identical to those found in the Dwelling Policies. See Dwelling Policy.
Property and liability coverage for a Home Day Care business is available to a homeowner under
endorsement HO 04 97. If the business is conducted in another structure, a limit of liability for that
structure is scheduled on the endorsement. The endorsement protects personal property of the described
business under the total Coverage C limit. As to Section II, Personally Liability and Medical Payments
coverage, bodily injury or property damage arising from the following is excluded:
1. Maintenance, use, loading, unloading or entrustment by the “insured” to others of draft or
saddle animals or vehicles used with them
2. Aircraft, all motorized land conveyances or watercraft, whether owned, operated or hired by or
or the “insured” or employees or used by the “insured” for instruction in their use
3. Injury to any employee of an “insured” , other than a “residence” employee, arising out of the
day care operation
The endorsement also imposes a policy year aggregate limit for liability and medical payments combined.
The limit corresponds to the Coverage E limit shown in the Declarations with further per person accident
sub-limit for day care related medical payments equal to the Coverage F limit. The sub-limit applies within
the aggregate limit of liability. Limits described on the endorsement apply even if contrary to those
contained in the policy or Declarations. The severability of insurance clause specifies that coverage applies
separately to insured’s except with respect to the aggregate limit. Therefore, the aggregate limit remains
unaffected by the number of insured’s.
SCHEDULED PRERSONAL PROPERTY INDORESEMENT – HO 04 61
Personal articles insurance may be written in conjunction with a homeowner’s policy by using endorsement
HO 04 61. This makes it convenient for a homeowner who wishes to broaden the scope of coverage on
personal property by writing the coverage on an open perils basis or who has value in excess of the limits
specified in the homeowner’s form for certain categories of property such as:
1. jewelry and furs
2. cameras, musical instruments, silverware, golfers equipment
3. fine arts, postage stamps and coins
It is important to remember the Coverage C exclusion of “articles separately described and specifically
insured in this or any other insurance” when deciding on amounts of insurance to be inserted in the
endorsement. The Coverage C amount will not contribute in case of loss to any property insured in the
endorsement, so it is important that each item is scheduled for an adequate amount of coverage. The full
effect of the “other insurance” provision can be avoided if an “insured” chooses not to schedule blanket
items, such as silverware, in the endorsement, but, instead, lists only the more valuable items specifically.
That is to say, a four-piece service for eight of ABC brands silverware—“Sonata Pattern”. Other silverware
items in the household thus escape the “other insurance” provisions and continues to have the protection of
Coverage C. Despite its appearance as a mere endorsement attached to the homeowner’s policy, the
personal articles floater remains a separate contract.
This endorsement is used to provide homeowners replacement cost coverage (otherwise available only for
buildings) on personal property such as awnings, carpeting, household appliance and outdoor equipment
including antennas. Certain items of property that are separately described and specifically insured in the
policy also receive replacement cost treatment under this endorsement. The current edition specifies that
items in this second category are limited to:
1. Jewelry, fur-trimmed or fur garments
2. Cameras, projection machines, films and related equipment
3. Musical equipment and related items
4. Silverware, silver-plated ware, goldware, gold-plated ware and pewterware, but not pens,
pencils, flasks or smoking implements
5. Golf clubs, golf clothing and golf equipment
SPECIAL PERSONAL PROPERTY ENDORSEMET –HO 00 15
When attached to Form HO 00 03, the only form with which it may be used, this endorsement converts
Coverage C – Personal Property from a named peril coverage to coverage on an open perils basis. The
exclusions that apply to the dwelling and other structures under Form HO 00 03 also apply to personal
property under this endorsement. Although jewelry, firearms and silverware are covered for “misplacing
and losing” under this endorsement, coverage is limited to $1000. This endorsement also alters collapse
coverage in the following ways:
1. Coverage for collapse is expanded to open perils coverage except that limitations continue to
apply to some building property such as awnings
2. Personal property is excluded from collapse coverage
3. Endorsement HO 00 15 also exempts personal property from the earth movement exclusion
4. Endorsement HO 00 15 specifies coverage for personal damaged by water away from a
premises or location owned, rented, occupied or controlled by an “insured”
5. Eliminates water damage cover for personal property on a premises or location owned, rented,
occupied or controlled by an “insured”, even when weather has contributed to the loss
PERMITTED INCIDENTAL OCCUPUNCY ENDORSEMENT
Many homeowner’s exclusions apply to business activities of an “insured”. This endorsement deletes these exclusions as they pertain to a business conducted on the “residence premises” because Coverage B of the
homeowner’s policy does not apply to any structures used for business purpose, this endorsement provides for scheduling a specified amount of coverage for an “other structures” on the “residence premises” that is
used in a business. The homeowner’s forms limit the amount of coverage for on-premises business property
to $2500. This endorsement increases coverage for on-premises business “furnishings, supplies and
equipment” to the Coverage C limit.
C—Personal Property Any Amount
D—Additional Living Expense 30% of Personal Property Amount
Tenants of apartment, single family dwellings or mobile homes are most commonly insured by the HO 00
04. But, owner-occupants of structures that are ineligible for the other homeowner’s policies can make use
of this form. For instance, the owner-occupant of a three family dwelling in a state where this type of
structure is not eligible for a HO-1, HO-2, HO-3 or HO-8 may use a HO-4 to insure personal property, loss
of use, personal liability, etc. (Separate dwelling coverage is needed to provide coverage on the building.)
Another use for a HO-4 arises in the following situation. If co-owners of a two family dwelling occupy the
separate living areas therein, a homeowner’s policy insuring the building may be issued to one of them with
an additional insured endorsement to cover the second owner’s interest in the building and in premises
liability. A homeowner’s HO-4 policy can then be issued to cover the contents and personal liability of the
second owner. When the co-owner is a non-occupant, he or she may be named as an additional insured for
building coverage and premises liability.
When an insured makes improvements to the rented property, his/her interest in those improvements is prorated
over the life of the lease. Unless otherwise, stated, the building owner assumes ownership on those
improvements at the end of the lease.
HO-6 CONDOMINIUM POLICY – Broad Form
A—Dwelling $1000
C—Personal Property Any Amount
D—Loss of Use 50% of A –Dwelling
An owner of an condominium or co-operative unit is eligible to purchase a homeowner’s Form HO 00 06
provided that the unit is primarily used for a residence and dose not house more than one additional family
or two boarders or roomers. Incidental occupancies are permitted here as with the other homeowner’s
forms. Form HO-6 includes the same 16 named perils as a HO-2 and provides an additional coverage for
Owners Building, Additions and Alterations. The HO-6 can also be purchased as an open peril policy for an
additional premium.
HO-8 MODIFIED COVERAGE FORM
The HO-8 Policy is utilized for property that is difficult to insure under any other plan. An example of this
would be an historical home. It is similar to the HO-1 Basic Form, i.e., a named peril policy with ACV on
both dwelling and personal property. The major difference is that the HO-8 utilizes Functional
Replacement Cost Value, i.e., plaster replaced with plasterboard.
The following changes are being made regarding the HO-5 Homeowner’s Policy and these excerpts are
taken from the ISO Notice to Portfolio holders notice dated 12-00.
NOTICE OF CHANGE STATEMENT
The forms and endorsement for the HO-2000 Program are not compatible with the forms and
endorsements of the 1991 edition of the Homeowners Program and Mobile home Supplement
Program and therefore cannot be used with existing policies. This portfolio distribution replaces all
current multistage forms and endorsements for the Program.
The HO 2000 forms and endorsements are reformatted to help identify important sections of the policy and
to enhance electronic delivery of these products to insurers. Policy language has also been revised to
improve readability and comprehension. While these changes do not alter coverage intent, other changes,
briefly discussed below, broaden or reduce coverage.
HOMEOWNERS 5 –COMPREHENSIVE FORM (Form HO 00 05)
Form 5 is reintroduced because of increased interest in Special Coverage for both private dwellings and
personal property. This form replies use of Form 3 with Endorsement HO 00 15. However, Form 5 does
not covered loss caused by earth movement, including earthquake. Coverage for such loss is included in the
optional Earthquake Coverage Endorsement included in this program.
1. Aircraft Liability, Hovercraft Liability, Motor Vehicle Liability and Watercraft Liability are
newly defined terms in the policy forms. These definitions include a “negligent supervise provision
accompany the “entrustment” and “Vicarious liability provisions currently part of the motor vehicle
and watercraft exclusions.
2. Business is redefined to precisely state when an activity is treated as a business and therefore, not
covered. A business can be full time, part time, occasional trade, profession or occupation or involve
any other activity engaged in for money or other compensation except for certain activities specified
in the definition.
3. Insured is:
a. redefined to refer to full time students of certain ages who resided on the residence premises as
relative-members on an insured’s household before attending school away from the residence premises. Part time student or those exceeding the age limitations may be added to the policy as
“Additional Insured’s” for an additional premium.
b. Defined to identify those insured’s who are the subject of a policy provision when the term “an” is used with the word insured.
4. Residence Employee is redefined to include a leased worker and exclude a temporary worker.
5. Residence Premises is refined to include three and four family dwellings.
DEDUCTIBLES – Deductible language which previously appeared in Policy Declarations is newly
added to the policy forms. However, the deductible amount is still shown in the Declarations.
1. Coverage B – Other Structures – coverage is broadened to include “an other structure” on the
residence premises that is used to store business property owned by the insured or a tenant of the
dwelling. However, a structure is NOT covered if any of the stored business property includes gaseous
or liquid fuel other than fuel in a vehicle or craft parked in the structure.
2. Covered C- Personal Property
a. Property of Guest and Others –the insured can now apply any part of their Coverage C limit to
property of a guest, residence employee or others after a covered loss to such property occurs.
b. Property at Another Residence of an Insured – the 10% limit that applies to such property does not
apply if it is in a newly acquired principle residence for 30 days from the time the insured begins to
move it there. Newly excepted from this limitation is covered property an insured temporarily moves
to another residence because the residence premises is being repaired or rebuilt and is not fit to live
in or store property in.
c. Special Limits of Liability – several categories of special limits are increased
• The limit that applies to money, bank notes, bullion, gold, etc., is revised to include “scrip, smart cards, stored value cards and platinum other than platinumware.
• The firearms category is revised to include “equipment related to firearms”
• the three business property categories that apply to “property used at any time or in any manner
for business purpose” is revised to apply only to “property used primarily for business purpose
d. Property Not Covered:
• Articles of property separately described insured – this “scheduled property”
provision is revised to emphasize that such property is not covered under Coverage C –Personal Property regardless of the limit for which it is specifically insured.
• Motor Vehicles Including Accessories and Equipment is revised as follows – “parts” is added to
Accessories and Equipment and the exception pertaining to “service vehicles” is revised to state
coverage for such vehicles only applies to vehicles used solely to service the insured’s residence
• Hovercraft, water and steam are added to the list of property not covered.
e. Coverage D – Loss of Use – the limit shown in the Declarations page for this coverage is increased (by rule) as follows:
• 20% to 30% of the Coverage A – Dwelling for Forms 2,3 or 5
• 20% to 30% of the Coverage C – Personal Property limit for Form 4
• 40% to 50% of the Coverage A – Dwelling limit for form 6
f. Section 1 –Additional Coverages
• Debris Removal –Removal of fallen trees
• The $500 limit is increased to $1,000 subject to a maximum payment of $500 per tree
• Coverage is broadened to apply to removal of trees that do not damaged a structure if the tree block a driveway or prevents use of a ramp or other type of access fixture designed to assist a handicapped person to enter or leave the dwelling
• Fund Transfer Card – this term is revised to “Electronic Fund Transfer Cards and Access
Devises”.
• Loss Assessment –revised in three ways
• To emphasize that the deductible applies on a per event than on a per assessment basis
• To note that the property sustaining loss, for which the assessment is made, must be of the type insured under the policy
• To emphasize that this coverage is additional insurance
• Collapse –revised to the define “collapse”, to emphasize that a building or part of a building in
danger of falling down or caving is not considered collapse; and to note that the terms “hidden
decay” and “hidden insect or vermin damage” do not include decay or damage of which an insured is aware before the building collapses
• Landlord’s Furnishings – revised to state that the basic limit of $2,500 is within the policy limits and that is applies separately to each rented unit
• Ordinance or Law –revised to state that coverage does not apply to pollutants “in or on” a covered structure
• Grave Markers – coverage is added to pay up to $5,000 for a covered loss to grave markers, Including mausoleums, regardless of where they are located and whether or not they are considered real estate
g. Perils Insured Against
• Smoke –revised to state that damage caused by the emission or puffback of soot, fumes or vapors from a boiler, furnace or related equipment is covered
• Vandalism or Malicious Mischief – the permissible vacancy period is revised from 30 to 60
consecutive days. The policy language is revised to state that any ensuring loss caused by any intentional and wrongful act committed by vandals in the course of the vandalism or malicious mischief is not covered when the premises has been vacant for more than 60 consecutive days.
• Accidental Discharge or Overflow of Water or Steam – revised to state that coverage is
provided for tearing out and replacing any part of a non-building structure covered under the
policy to access a break in the plumbing system on the residence premises if the water or stream that is leaking from the system is causing damage to an insured building. This peril is further revised to:
• Clarify that the plumbing system and household appliances do not include sump pumps and gutters, down spouts, roof drains or other similar equipment or fixtures
• Indicate that damage caused by mold, fungus or wet rot that is hidden within walls as ceilings or above the ceiling or below the floor is covered
• Freezing –this peril is revised to:
• Specify that the requirement for maintaining heat in a dwelling or shutting off the water supply and draining the water from the pipes and appliances apply to all dwellings water they are under construction, vacant, unoccupied or occupied
• Indicate that the requirement to shut off the water supply and drain the pipes and appliances does not apply to a building on the residence premises that contains an automatic fire protective sprinkler system
• Sudden and Accidental Damage from Artificially Generated Electrical Current – Editorial changes made to reflect changes in terminology and technology
h. Forms HO 00 03 and HO 00 05 – the following perils are revised
• Mold and Wet Rot – the term “fungus” is added to this group
• Mechanical Breakdown, Latent Defect and Inherent Vice – the phrase “any quality in
property that causes it to damage or destroy itself” is added to emphasize the meaning of the
technical terms “latent defect” and “inherent vice”.
1. Introductory Paragraph – the lead-in language is revised to state that the exclusions in this
section of the form apply whether or not loss results wind spread damage or affects a substantial
area
2. Earth Movement and Water Damage –revised to emphasize that there is no coverage even if
the excluded event is caused by or resulted from human or animal forces or any act of nature
3. Water Damage – revised to emphasize the board application of this exclusion and add the
terms “water-home material” and “discharge”.
4. International Loss—revised to emphasize that there is no coverage for all insured’s if another
insured commits or conspires to commit damage that results in an otherwise covered loss
5. Governmental Action – the destruction, confiscation or seizure of covered property by order of
any governmental or public authority is now excluded. However, this exclusion does not apply
to action taken by the authority at the time of a fire to prevent its spread.
SECTION
1 –CONDITIONS
a. Duties After Loss – revised to require the cooperation of an insured in the settlement of a suit and to give the insurer the right to deny coverage for a loss when an insured fails to fulfill such duties
b. Loss Settlement –revised to emphasize that:
• Repair or replacement cost does not include the increased cost resulting from the enforcement of any ordinance or law
• Replacement will be with materials of like kind and quality and for like use of the damaged
building
• Property rebuilt at a different premises is limited to the cost of rebuilding at the original premises
• An insured is permitted to elect the replacement cost option by notifying the insurer of such intent within 180 days after the loss
c. Appraisal –revised to state that an appraiser must be impartial as well as competent
d. Other Insurance and Service Agreement --“Service Agreement” is add to this conditions
because of the proliferation of home warranties and appliances service and maintenance agreements that could result in loss payment under a Homeowners policy and a warranty or maintenance contract when both cover the same property involved in the loss
e. Suit Against Us – increased the time limit for an insured to bring suit from one to two years
and revised policy language to indicate that a suit cannot be through until there is a full compliance will all of the terms of the policy
f. Mortgage Clause – reference to “trustee” is deleted given the new optional coverage available for trusts and trustees
g. Loss Payable Clause—this is a new condition that will enable the loss payee’s interest in
articles of personal property to be specifically listed in the Declarations
S –Liberalization –revised to state that liberalization does not
apply to general program revisions which include both broadening and restriction in coverage implemented
through the introduction of a subsequent edition of the policy or introduction of any amendatory
endorsement.
FORMS UPDATED –New Forms—the following forms have been updated:
• HO 00 05 10 00 – Homeowner 5 – Comprehensive Form
• HO 04 43 10 00 –Replacement Cost Loss Settlement for certain Non-Building Structures
on the residence premises—provides replacement cost loss settlement for certain nonbuilding structures that are subject to rapid depreciation
• HO 04 58 10 00 –Other Members of Your Household –provides coverages for the personal property, additional living expense and personal liability exposures of a live-in companion of a named insured
• HO 04 59 10 00 –Assisted Living Care Coverage—provides coverage for the personal property, additional living expense and personal liability exposures liability exposures of relatives of the named insured who resides in an assisted living care facility
• HO 04 06 10 00 –Scheduled Personal Property (with agreed value loss settlement) – provides agreed value loss settlement for certain articles of personal property scheduled under this endorsement
• HO 05 24 10 00 – Special Personal Property Coverage –Form HO 00 04 only – provides
Special Coverage for students who fall outside of the revised definition of “insured in the policy form
• HO 05 28 10 00 –Owed Motorized Golf Cart Physical Loss Coverage – provides Special Coverage for owned motorized golf carts with an option to include or exclude the Collision peril
• HO 05 41 10 00 Extended Theft Coverage for Residence Premises Occasionally Rented
to Others –replaces endorsement HO 04 80 and provides broader coverage for loss by theft to covered property from anywhere on the residence except the part regularly rented to a tenant
• HO 05 43 10 00 –Residence Held in Trust—enables a homeowners policy to be written on a dwelling owned by a trust
• HO 05 46 10 00 –Landlord’s Furnishings – increase the $2500 basic limit in the policy forms
• HO 17 34 10 00 – Unit Owners – Modified Other Insurance and Service Agreement
Condition – replaces the Other Insurance and Service Agreement Condition in Form HO
00 06 with one that does not require a condominium association to first recover a loss payment under its policy before the Form 6 policy responds The following endorsements are used with optional Home Business Coverage End HO 07 01:
• HO 07 50 10 00 –Additional Insured – Managers or lessors of Premises Leased to an
Insured – provides coverage to designed persons or organizations for their liability as owners or designated premises leased to the named insured
• HO 07 51 10 00 – Additional Insured – Vendors – provides liability coverage for
distributors arising out of the designated vendor’s sale or distribution of the name
insured’s products
• HO 07 52 10 00 – Loss Payable Provisions – provides for nanning a loss payee, lender’s loss payee, or loss payee under a contract-of-sale arrangement
• HO 07 53 10 00 – Exclusion –Personal and Advertising Injury – excludes all coverages for personal and advertising injury liability
• HO 07 54 10 00 –Liquor Liability Exclusion and Exception for Scheduled Activities –
liability coverage whenever alcohol is served or furnished with or without charge if a license is required for the activity and provides a means to optionally except specific functions from the exclusion
• H) 07 55 10 00 – Special Coverage –Spoilage of Perishable Stock –provides Special Coverage to perishable stock listed in the endorsement due to breakdown, contamination or power outage
• HO 07 56 10 00 – Valuable Paper and Records Coverage Increased Limits—Increases the basic limit in the Home Business Coverage Endorsement
• HO 07 57 10 00 –Special Coverage Valuable Papers and Records – provides Special Coverage for Valuable Paper and Records Revised Forms:
• HO 04 11 10 00 – Additional Limits of Liability for Coverages A, B, C, and D; and HO
04 20 10 – Specified Additional Amount of Insurance for Coverages A –Dwelling—the replacement cost loss settlement condition in these endorsements is broadened to apply to all property insured Coverage A, not just the dwelling building
• HO 04 14 10 00 – Special Computer Coverage – the definition of “computer
equipment” is dated to reflect the latest changes in technology and terminology
• HO 04 16 10 00 –Premises Alarm or Fire Protection System – clarified to state that a premium credit may be granted for one or more alarms or fire protection systems
• HO 04 35 10 00 – Loss Assessment Coverage –revised to express that the increased amount of insurance applies to both Section I and Section II
• HO 04 61 10 00 – Scheduled Personal Property endorsement is revised to:
• Provide coverage for theft of stamps and coins from an unattended auto
• Provide coverage for fine arts while anywhere in the world, not just a defined territory
• Emphasize that when the Personal Property Replacement Cost Loss Settlement endorsement is attached to the policy, most of the property insured under Endorsement HO 04 61 will also be subject to replacement cost loss settlement
• HO 04 90 10 00 – Personal Property Cost Loss Settlement –revised to express that replacement cost loss settlement does not apply to losses settled on an agreed value basis
• HO 04 95 10 00 – Water Back Up and Sump Discharge or Overflow – revised to complement the changes to the Water Damage Exclusion in the policy forms and to emphasize that flood-induced back up, discharge or overflow is not covered
• HO 05 83 10 00 –Rating Information –Property Remediation for Escaped Liquid Fuel
and Limited Lead and Escaped Liquid Fuel Liability Coverage –revised to include policy language that complements changes made to the Homeowners forms and to:
• Update the definition of “fuel systems”
• Add government funds to the Other Insurance and Service Agreement Condition
• State that in additional coverage for Loss Assessment does not increase the aggregate limit of liability
• HO 07 01 10 00 –Home Business Insurance Coverage – received to emphasized that the
insured farm premises declared in the Schedule of the endorsement is covered when it is
rented or held for rental for farming purposes and whether or not it contains a dwelling
also rented or held for rent
Additional Information All of the following are true of the Mobile Home Endorsement may be endorsed to homeowner forms HO 00 02 and HO 00 03, the mobile home must be resided in year
round and the mobile home must be at least 10 feet wide and 40 feet long.
All of the following are true of the Inflation Guard Endorsement of the homeowner’s policy inflation Guard coverage is written to increase as a percent of the dwelling
amount, coverage increases during the policy term and coverage increases apply to
Coverages A, B, C, and D.
72. In 1975 a homeowner insured his home for its purchase price of $100,000 and added
the Inflation Guard Endorsement. To be properly insured, what amount should the
insured be carrying today at the current cost to replace the property with like kind and
quality at today’s rebuilding cost.
