Homeowners Forms HO-2 through HO-8 and Eligibility
Key Takeaways
- HO-3 = dwelling open-peril, contents named-peril; HO-5 = both open-peril (the broadest).
- HO-2 is named-peril on dwelling and contents; HO-8 is the Modified Form for older homes settling on repair/functional-replacement.
- HO-4 (renters) has NO Coverage A; HO-6 (condo) has a $5,000 base Coverage A that can be increased.
- Owner-occupancy is required for HO-2/3/5; landlords use Dwelling (DP) policies, renters use HO-4.
- The current widely-tested edition is HO 00 03 05 11 (May 2011).
The ISO Homeowners Program
The Homeowners (HO) policy is a package policy combining property coverage (Section I) and personal liability coverage (Section II) into one contract. Most insurers file the ISO Homeowners 3 (HO 00 03) program, with the current widely-used edition being the HO 00 03 05 11 (May 2011) revision; some carriers have moved to later editions, but exam questions key on the 2011 form structure. Knowing which numbered form applies to which risk is among the most heavily tested topics on the national portion.
The form number drives three things at once: who is eligible (owner-occupant, tenant, condo unit-owner), how the dwelling perils are written (named-peril vs. open-peril), and how losses settle (replacement cost vs. actual cash value). Memorize the grid and you answer a cluster of questions correctly.
The Six Homeowners Forms
| Form | Common Name | Eligible Insured | Coverage A (Dwelling) Perils | Coverage C (Contents) Perils |
|---|---|---|---|---|
| HO-2 | Broad Form | Owner-occupant | Named perils (broad) | Named perils (broad) |
| HO-3 | Special Form | Owner-occupant | Open perils (all-risk) | Named perils (broad) |
| HO-4 | Contents Broad / Renters | Tenant | No Coverage A | Named perils (broad) |
| HO-5 | Comprehensive | Owner-occupant | Open perils | Open perils |
| HO-6 | Unit-Owners / Condo | Condo unit-owner | Named perils (limited Cov A $5,000 base) | Named perils (broad) |
| HO-8 | Modified | Owner-occupant (older homes) | Named perils (limited) | Named perils (limited) |
The single most important distinction: HO-3 covers the dwelling on an open-peril basis but contents on a named-peril basis, while HO-5 covers both dwelling and contents open-peril. HO-2 is named-peril on everything. There is no HO-1 or HO-7 in the modern ISO program (HO-1 was withdrawn in most states).
Eligibility Rules That Generate Questions
- HO-3 and HO-5 require an owner who occupies the one-to-four-family dwelling. A landlord renting to others is NOT eligible (that risk goes to a Dwelling DP policy).
- HO-4 insures a renter's personal property and liability inside a dwelling the insured does not own. Coverage A is zero; the renter never insures the building.
- HO-6 insures the condominium unit-owner. The base Coverage A (building items the unit-owner is responsible for, like interior walls and improvements) is only $5,000 but can be increased by endorsement. The condo association's master policy covers the building structure.
- HO-8 is the Modified Form for older homes whose replacement cost greatly exceeds market value (e.g., a historic brownstone). It settles dwelling losses on a repair-cost / functional-replacement basis rather than full replacement, and uses a narrow named-peril list (it typically excludes theft of non-residence-premises property and pays theft on a limited basis).
A classic trap: a candidate selects HO-3 for a renter. Wrong - a renter has no insurable interest in the building, so HO-4 is the only correct contents-only form.
An applicant owns and lives in a single-family home and wants the broadest available coverage, with BOTH the dwelling and personal property written on an open-peril (all-risk) basis. Which ISO form fits?
A condominium unit-owner buys an HO-6. The standard base limit for Coverage A (the unit-owner's building items, such as interior improvements) is:
The Homeowners Forms at a Glance
The ISO Homeowners program packages property (Section I) and liability (Section II) into one contract for owner-occupants, renters, and unit owners. The forms are HO-2 (Broad, named-peril on dwelling and contents), HO-3 (Special, open-peril on dwelling and other structures with named-peril contents), HO-4 (Contents Broad, for renters), HO-5 (Comprehensive, open-peril on both dwelling and contents), HO-6 (Unit-Owners, for condominium owners), and HO-8 (Modified, for older homes settled on a functional/ACV basis). HO-3 is the market standard, and HO-5 is its open-peril-contents upgrade.
Why HO-3 vs. HO-5 Matters
The single most-tested form distinction is HO-3 versus HO-5. Both insure the dwelling and other structures on an open-peril basis, but HO-3 covers personal property on a named-peril basis while HO-5 covers personal property on an open-peril basis. So a sudden, hard-to-classify loss to contents (an unexplained but accidental damage to electronics) may be covered under HO-5 yet denied under HO-3 because the insured cannot tie it to a named peril. Expect a scenario contrasting identical contents losses under the two forms.
Eligibility Rules That Generate Questions
Eligibility drives many questions. HO-2, HO-3, HO-5, and HO-8 require an owner-occupant of a one-to-four-family dwelling; a non-owner-occupied rental belongs in the dwelling program, not homeowners. HO-4 fits a tenant who needs contents and liability but not building coverage, since the landlord insures the structure. HO-6 fits a condominium or co-op unit owner, insuring betterments and improvements, personal property, and loss assessment, while the association's master policy covers the building shell.
HO-8 fits older homes whose replacement cost far exceeds market value, settling losses on a modified (functional/ACV) basis to avoid over-insurance.
Matching the Insured to the Right Form
The exam frequently gives a profile and asks for the proper form. A renter needs HO-4. A condo owner needs HO-6. An owner of a historic home where rebuilding would cost far more than the home is worth needs HO-8. An owner who wants the broadest protection on both structure and contents chooses HO-5, while the budget-conscious owner accepts HO-3's named-peril contents. A landlord renting the house to others is ineligible for homeowners entirely and must use a DP form. Reading the occupancy and the desired breadth, then naming the form, is the core skill, so practice translating each profile directly into a form number.