4.1 ISO Homeowners Policy Forms: HO-2 Through HO-8

Homeowners Policy Forms & Coverage Structure

Quick Answer: Standard ISO Homeowners policies divide protection into Section I (Property: Coverages A, B, C, and D) and Section II (Liability: Coverages E and F). The HO-3 Special Form is the baseline residential contract in Florida, providing open-peril coverage on the dwelling and other structures while restricting personal property to 16 broad named perils. For complete open-peril protection on both structures and contents, the insured must secure an HO-5 Comprehensive Form.

For property claims adjusters in Florida, understanding the exact boundaries of the Insurance Services Office (ISO) Homeowners policy series is critical. Policy interpretation dictates whether an adjuster investigates an unlisted loss under an open-peril standard or enforces the strict burden of proof required under a named-perils form.

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ISO Homeowners Policy Forms Comparison

The ISO homeowners program consists of six primary package forms designed to meet specific residential occupancy profiles. Every form combines property (Section I) and liability (Section II) protections into a single indivisible package contract.

1. HO-2 (Broad Form)

• Peril Structure: Named perils on both dwelling/other structures and personal property.
• Scope: Insures against the 16 broad named perils (fire, lightning, windstorm, hail, explosion, riot, aircraft, vehicles, smoke, vandalism, theft, falling objects, weight of ice/snow/sleet, accidental discharge of water/steam, sudden tearing apart of heating/cooling systems, freezing of plumbing, and artificially generated electrical damage).
• Loss Settlement: Replacement cost on buildings (subject to 80% coinsurance); Actual Cash Value (ACV) on personal property.

2. HO-3 (Special Form)

• Peril Structure: Open perils ("all-risk") on Coverage A (Dwelling) and Coverage B (Other Structures); Broad named perils on Coverage C (Personal Property).
• Significance: The most widely written homeowner form in Florida. Any direct physical loss to the building is covered unless specifically excluded in the policy contract.
• Burden of Proof: On building claims, the insurer bears the legal burden to prove that an excluded peril caused the damage. On personal property claims, the policyholder bears the burden to prove that one of the 16 named perils caused the loss.

3. HO-4 (Contents Broad Form / Tenants Form)

• Peril Structure: Named perils on personal property (Coverage C).
• Eligibility: Non-owner tenants renting an apartment, condominium, or detached dwelling.
• Coverage Structure: Provides no Coverage A (Dwelling) or Coverage B (Other Structures). Provides Coverage C (Personal Property) and Coverage D (Loss of Use / Additional Living Expense), alongside full Section II liability.

4. HO-5 (Comprehensive Form)

• Peril Structure: Open perils on Coverage A (Dwelling), Coverage B (Other Structures), and Coverage C (Personal Property).
• Significance: The broadest coverage available. Personal property losses are covered against any accidental direct physical cause unless explicitly excluded. Shifts the burden of proof to the insurer for both structure and contents claims.

5. HO-6 (Unit-Owners Form / Condominium Form)

• Peril Structure: Broad named perils on Coverage A (Dwelling) and Coverage C (Personal Property), though open-perils endorsements are commonly added.
• Florida Statutory Context: In Florida, condominiums operate under Florida Statute § 718.111(11). The condominium association master policy insures the structural building shell, perimeter exterior walls, roof, and common elements. The individual unit owner's HO-6 policy covers interior finishes, floor coverings, wall coverings, cabinetry, interior non-bearing partitions, appliances, and fixtures inside the unfinished drywall/stud line. Under Florida law, an HO-6 policy must provide a minimum of $10,000 for Coverage A.

6. HO-8 (Modified Coverage Form)

• Peril Structure: Basic named perils (fire, lightning, windstorm, hail, explosion, riot, civil commotion, aircraft, vehicles, smoke, vandalism, volcanic eruption, and limited on-premises theft up to $1,000).
• Eligibility: Older, architectural, or historic homes where the replacement cost substantially exceeds the current market value (for example, an antique Victorian home with a replacement cost of $650,000 but an open market value of $200,000).
• Loss Settlement: Settled on a Functional Replacement Cost or Actual Cash Value basis. Repairs use modern, common construction materials and methods (e.g., standard drywall instead of custom plaster and lath) to prevent severe moral hazard.

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Summary Comparison of ISO Homeowners Policy Forms

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