11.1 HO-2, HO-3, HO-4, HO-5, HO-6, and HO-8 Compared
Key Takeaways
- The ISO homeowners program packages Section I property and Section II liability; pick the form from occupancy and ownership, not from the fact that someone lives at the address.
- HO-2, HO-3, HO-5, and HO-8 are 1–4 family owner-occupant forms; HO-4 is the tenants contents form with no Coverage A dwelling; HO-6 is the condominium unit-owners form.
- HO-3 Special Form is the market standard and the AINS default: open perils on the dwelling and other structures, named perils on personal property.
- Named-perils coverage requires the insured to prove a listed peril; open-perils (special form) covers direct physical loss unless an exclusion applies—the insurer must prove the exclusion.
- HO-8 Modified Form exists for older dwellings whose replacement cost and market value have diverged; building settlement is often functional replacement cost or actual cash value, not a full modern rebuild.
11.1 HO-2, HO-3, HO-4, HO-5, HO-6, and HO-8 Compared
Quick Answer: The ISO Homeowners (HO) program is a package of Section I property and Section II liability. Eligibility follows occupancy: HO-2, HO-3, HO-5, and HO-8 for a 1–4 family owner-occupant; HO-4 for tenants (no Coverage A dwelling); HO-6 for condo unit-owners. HO-3 Special Form is the market standard and the AINS default: open perils on the dwelling and other structures, named perils on personal property. Open perils covers direct physical loss unless an exclusion applies—it is not a promise that flood, earth movement, or wear and tear will pay.
AINS 102 Assignment 3, What’s in a Homeowners’ Policy?, is the form chapter. Assignment 1 classified household loss exposures. This assignment puts an ISO form on those exposures. The Institutes workplace skill is operational: a customer service representative (CSR) or producer hears “I rent,” “I own the unit,” or “the house is from 1910,” and does not quote a generic “homeowners policy.” The person matches occupancy to a form and knows whether a loss will be analyzed as a named peril the insured must prove or as a special-form grant the insurer must exclude.
Unless a stem names another form, treat the homeowners policy as HO-3. Learn HO-2, HO-4, HO-5, HO-6, and HO-8 as documented deviations from that standard.
What the ISO homeowners program is
A homeowners policy is a multiline package. One declarations page, one deductible schedule, one set of conditions, and two coverage parts:
- Section I — first-party property: the dwelling, other structures, personal property, and loss of use.
- Section II — third-party liability: personal liability and medical payments to others.
It is not a dwelling-fire policy (property only) plus a separate personal liability supplement, although a dwelling program still exists for risks the HO program will not write. ISO publishes the family. Carriers file ISO or independently file look-alikes. State amendatory endorsements change wording. The exam tests program architecture, not one company’s brochure name.
Eligibility: occupancy decides the form
Owner-occupant forms — HO-2, HO-3, HO-5, HO-8. The named insured must own and occupy a 1- to 4-family dwelling used principally as a private residence. An incidental office, studio, or private school in the dwelling may still fit. A working farm, a boarding house, or a building the owner never occupies does not. Mobile homes generally sit outside standard HO-2/3/5/8 eligibility and need a mobilehome program or endorsement.
Tenant form — HO-4 (Contents Broad Form). The insured rents a house or apartment and does not own the structure. There is no Coverage A dwelling grant for the landlord’s building. Contents, loss of use, and Section II are the product. Occupying a unit is not a dwelling-building exposure.
Unit-owners form — HO-6. The insured owns a condominium or cooperative unit. The association master policy typically covers the building shell and common elements. Coverage A on HO-6 is still real: interior building items, improvements and betterments, and real property the association agreement makes the unit owner insure. HO-6 is not HO-4 with a different number.
Do not pick a form from “I live here.” Ownership of the structure, plus how the building is titled, decides HO-2/3/5/8 versus HO-4 versus HO-6.
Named perils versus open perils
Named-perils (specified perils) coverage pays only if a listed cause—fire or lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism or malicious mischief, theft, falling objects, weight of ice, sleet, or snow, accidental discharge or overflow of water from a plumbing system, sudden tearing of a steam or hot-water system, freezing, sudden damage from artificially generated electrical current, volcanic eruption, and the rest of the broad-form list—caused the direct physical loss. The insured has the burden to show a listed peril.
Open-perils (special form; historically marketed as all-risks) covers direct physical loss to covered property unless an exclusion applies. The insurer has the burden to prove an exclusion. Open perils is not a flood policy, not an earth-movement policy, and not a maintenance contract for wear and tear, settling, or vermin.
That burden shift is the exam point. On an HO-3 dwelling claim, start by asking whether an exclusion applies. On an HO-3 contents claim, start by asking whether a named peril fits. A stain on hardwood and a stain on a sofa after the same pipe burst are not analyzed the same way.
The six forms compared
| Form | Market name | Who is eligible | Dwelling / other structures (A / B) | Personal property (C) | Building settlement flavor |
|---|---|---|---|---|---|
| HO-2 | Broad Form | 1–4 family owner-occupant | Named perils | Named perils | Typically replacement cost if insured to at least 80% of replacement cost |
| HO-3 | Special Form | 1–4 family owner-occupant | Open perils | Named perils | Same 80% replacement-cost condition; the market standard |
| HO-4 | Contents Broad Form | Tenants / renters | No Coverage A on the landlord’s dwelling | Named perils | Not a building form |
| HO-5 | Comprehensive Form | 1–4 family owner-occupant | Open perils | Open perils | Replacement cost / 80% condition; contents often replacement cost by form design |
| HO-6 | Unit-owners Form | Condo / co-op unit-owner | Coverage A is the unit owner’s building items and improvements | Named perils (often endorsable to special) | Unit interior and betterments, not the high-rise shell |
| HO-8 | Modified Form | Older owner-occupied dwellings that will not support HO-2/3/5 | Named perils (often a tighter list) | Named perils | Often functional replacement cost or actual cash value (ACV) |
HO-2 puts the broad named-perils list on both the house and the furniture. It is less common in the voluntary market than HO-3 because the premium gap is often small compared with the special-form dwelling grant. If a stem says Broad Form, do not upgrade it to open perils on Coverage A.
HO-3 is the form you should be able to recite in your sleep. Open perils on Coverage A and Coverage B. Named perils on Coverage C. Owner-occupant. When an AINS item says “homeowners policy” and names no form, treat it as HO-3 unless the facts force another.
HO-4 is renters insurance. A fire in the apartment building does not create a Coverage A claim for the tenant. It may create a contents claim, an additional-living-expense claim, and a Section II claim if the tenant is legally liable. Quoting HO-3 to a tenant is an identification miss, not a generous upgrade.
HO-5 is HO-3 with open perils extended to personal property. Mysterious disappearance of jewelry, rain-soaked furniture with no storm-created opening, and other “no named peril fits” contents losses are why households buy HO-5 or a special-personal-property endorsement on HO-3. Special limits and exclusions still apply. Comprehensive is not unlimited.
HO-6 splits the building with the association master policy. Coverage A exists, but it is not the entire tower. The unit owner still needs a stated Coverage A limit that matches the association agreement (walls-in, original specifications, or improvements).
HO-8 exists because an 1890 masonry row house can have a replacement cost no insured will buy and no underwriter will write at HO-3 rates. Functional replacement (common materials and methods) or ACV keeps the policy an indemnity contract instead of a windfall rebuild in modern luxury finishes.
How to pick the form on an exam stem
- Does the insured own the structure occupied as a residence? No → HO-4 (renter) or HO-6 (condo unit). Yes, 1–4 family → owner form.
- Is it a condominium or cooperative unit? → HO-6. A master policy on the shell does not turn the unit owner into a renter.
- Is the dwelling older, unique, or replacement-cost-far-above-market? → HO-8 may be the only owner form offered.
- Does the stem want open perils on contents? → HO-5, or HO-3 plus a special-personal-property endorsement. Unendorsed HO-3 is named perils on Coverage C.
- Is HO-3 still the default owner form? Yes.
Exam traps in this comparison
- HO-3 is not open perils on everything. Buildings special, contents named.
- HO-4 is not a dwelling form. No Coverage A for the landlord’s building.
- All-risks is not all losses. Flood, earth movement, ordinance or law (beyond a limited additional coverage), off-premises power failure, and wear and tear still sit outside the grant.
- HO-6 Coverage A is real. Improvements, built-ins, and association-required unit-owner building items.
- HO-8 is not HO-3 with a bigger deductible. Both the peril list and the settlement method change.
A CSR who can put a phone call onto the comparison table is doing Assignment 3. Later sections open the HO-3 jacket: Coverages A–D, perils and settlement, then Section II and the conditions that decide whether a covered loss actually pays.
An owner-occupant of a one-family house has an unendorsed ISO HO-3. A supply line bursts. Water stains hardwood flooring (Coverage A) and a sofa (Coverage C). How should the perils be analyzed?
Which statement correctly matches an ISO homeowners form to occupancy?
Coverage A on an ISO HO-6 unit-owners form is best described as which of the following?
An 1890 owner-occupied masonry dwelling has a replacement cost far above its market value, and no insurer will write HO-3 at that replacement-cost limit. Which ISO form is designed for that mismatch?