Homeowners Forms HO-2 through HO-8 and Eligibility
Key Takeaways
- HO-3 (Special Form) is the most common owner policy: open-perils on the dwelling, named-perils on personal property.
- HO-5 is the broadest, applying open-perils to both dwelling and personal property; HO-8 is the narrowest, for older homes settled on a functional/repair basis.
- HO-4 (renters) and HO-6 (condo) cover the occupant's interest and do not require building ownership.
- HO-2 is broad named-perils on both; HO-7 does not exist in the standard ISO program.
- Owner-occupied 1-4 family dwellings are eligible; farms and primarily-business properties are not.
The ISO Homeowners Program
The modern homeowners (HO) program is built on the ISO Homeowners 2011 (HO 2011) and Homeowners 2022 (HO 2022) form series, though many states still use the older HO 2000 editions. Whichever edition your state exam tests, the structure is identical: a single policy bundles Section I (property) and Section II (liability) coverage. The exam expects you to know which form provides which level of coverage, who is eligible, and how the named-peril vs. open-peril distinction drives price and protection.
Every HO form begins with a Declarations page (insured, address, limits, deductible, form/edition), followed by the Agreement and Definitions, then Sections I and II. The form number itself signals the coverage breadth.
The Six Owner-Occupant and Tenant Forms
Memorize this table cold; the exam loves to ask which form fits a described risk.
| Form | Name | Dwelling Perils | Personal Property Perils | Typical Insured |
|---|---|---|---|---|
| HO-2 | Broad Form | Named (broad, ~16 perils) | Named (broad) | Owner-occupant wanting economy |
| HO-3 | Special Form | Open (all-risk) | Named (broad) | Most common owner policy |
| HO-4 | Contents Broad Form | (no dwelling cov.) | Named (broad) | Renters/tenants |
| HO-5 | Comprehensive Form | Open | Open (all-risk) | High-value owner, broadest |
| HO-6 | Unit-Owners Form | Limited (Cov. A min $5,000) | Named (broad) | Condominium owners |
| HO-8 | Modified Coverage Form | Named (basic, ~10 perils) | Named (basic) | Older/historic homes |
Note: HO-7 is not part of the standard ISO program (a distractor). The mobile-home risk is handled by an MH endorsement, not a separate HO number.
How the Forms Differ on Perils
The two highest-volume forms are HO-3 and HO-5.
- HO-3 (Special Form) insures the dwelling and other structures on an open-perils basis (covered unless excluded) but insures personal property on a named-perils basis. This split is the single most-tested fact in the HO program.
- HO-5 (Comprehensive) extends open-perils coverage to both the dwelling and personal property, giving the broadest protection at the highest premium.
- HO-8 (Modified) exists because some older homes have a replacement cost far exceeding market value. HO-8 settles losses on a functional/repair-cost basis using common construction materials, and limits perils to the basic named list (it deletes theft of property away from the residence and pays theft only up to a sublimit).
Eligibility Rules
Eligibility questions trap candidates who confuse forms. Key rules:
- The dwelling must be owner-occupied (1-4 family) for HO-2, HO-3, HO-5, and HO-8. HO-4 and HO-6 do not require ownership of the building; they cover the occupant's interest.
- A dwelling used incidentally for business (a permitted home office) can stay on an HO form; a building used primarily as a business needs a commercial policy or the BOP.
- Seasonal/secondary dwellings are eligible but often require an endorsement.
- A risk can be written on no more than the form's family limit (typically up to 4 families with an endorsement for HO-3); a 5-unit building moves to a Dwelling (DP) or commercial program.
- Farms are ineligible for HO forms (use a Farmowners policy).
A tenant rents an apartment and wants to insure her furniture, clothing, and personal liability, but not the building itself. Which ISO homeowners form is designed for her?
On an HO-3 Special Form, how are the dwelling and the personal property each insured against loss?
The Six Forms and Their Peril/Valuation Design
The ISO homeowners program offers six forms, and the exam expects you to match each to its insured and peril basis:
| Form | Insured | Dwelling/Structure perils | Contents perils |
|---|---|---|---|
| HO-2 (Broad) | Owner-occupant | Named peril | Named peril |
| HO-3 (Special) | Owner-occupant | Open peril | Named peril |
| HO-4 (Contents/Renters) | Tenant | n/a (no building) | Named peril |
| HO-5 (Comprehensive) | Owner-occupant | Open peril | Open peril |
| HO-6 (Condo unit) | Condo owner | Named peril (walls-in) | Named peril |
| HO-8 (Modified) | Owner of older home | Named peril, functional/ACV loss settlement |
Exam alert: HO-3 insures the structure open-peril but contents named-peril; HO-5 upgrades both to open peril. HO-8 exists for older or historic homes whose market value is far below replacement cost — it settles at functional replacement cost or ACV to avoid over-insuring a structure that cannot be economically rebuilt to original specifications.
Homeowners Eligibility Rules
The homeowners program is built for owner-occupied dwellings of one to four families, with the named insured occupying the home as a primary or secondary residence. Incidental business and certain home-based occupancies can be accommodated by endorsement, but the dwelling cannot be primarily commercial. Properties that fail HO eligibility — rental-only dwellings, vacant homes, homes in serious disrepair, or seasonal-only risks — are written on the Dwelling (DP) program instead.
HO-4 covers a tenant (no building, just contents and liability); HO-6 covers a condominium unit owner for the interior, improvements, and loss assessment. A farm exposure removes HO eligibility and is written on a Farmowners form. Tying the right form to occupancy, ownership, and condition is the recurring eligibility question.
Section I vs. Section II and Form Selection Logic
Every owner-occupant homeowners form bundles two halves: Section I (Property) covers the dwelling, other structures, contents, and loss of use, while Section II (Liability) provides personal liability (Coverage E) and medical payments to others (Coverage F). The forms differ only in Section I; Section II is identical across HO-2, HO-3, HO-5, HO-6, and HO-8, which is why the exam phrases form-selection questions around the property side.
To select a form, work through three questions in order: Who occupies and owns? (tenant -> HO-4; condo owner -> HO-6; otherwise an owner-occupant form). What peril breadth does the client want? (broadest -> HO-5 open-peril on both structure and contents; standard -> HO-3 open structure/named contents; budget -> HO-2 named on both). Is the home older with replacement cost far above market value? (-> HO-8 modified, settling at functional replacement cost or ACV).
Exam alert: A client who wants the widest protection and asks for "all-risk on contents too" needs HO-5, not HO-3 — HO-3 leaves contents on a named-peril basis. A historic home that would cost far more to rebuild than it is worth needs HO-8, because insuring it to full replacement cost is neither required nor economical. Mismatching occupancy to form (selling an HO-3 to a renter who owns no structure) is the classic wrong answer.