4.7 Endorsements and Common Add-ons

HO 04 90 — Personal Property Replacement Cost

This endorsement upgrades Coverage C from ACV to RCV. At the time of loss the insurer first pays ACV; the balance up to RCV is paid only after the insured actually repairs or replaces the item — a deliberate design to prevent profiting from a loss. Antiques, fine art, memorabilia, and obsolete or irreplaceable items typically remain on an ACV/market-value basis even with this endorsement.

HO 04 65 — Scheduled Personal Property

A separate, inland-marine-style schedule for high-value articles that lists each item and a value:

• Open perils, including mysterious disappearance (item simply gone, no known cause)
• Agreed value based on a recent appraisal or bill of sale
• Typically no deductible
• Eligible classes: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine art, stamp/coin collections, and firearms

Scheduling is the fix whenever a question stresses full value plus mysterious disappearance on an item that the base form caps (jewelry $1,500 theft, firearms $2,500 theft).

HO 04 95 — Water Backup and Sump Discharge or Overflow

Buys back the sewer/drain backup and sump-pump failure loss that the base form excludes. Limits typically run $5,000–$25,000 for a modest extra premium — essential for finished basements.

HO 04 96 — Home Systems Protection (Equipment Breakdown)

Covers sudden mechanical or electrical breakdown of HVAC, water heaters, well pumps, refrigerators, washers/dryers, pool equipment, and generators. Without it, such breakdown is excluded as wear and tear or mechanical breakdown.

Identity Theft Restoration

Reimburses expenses to restore identity after theft — notary and attorney fees, lost wages, mailing, and credit-monitoring costs, often $15,000–$25,000. It does not reimburse the fraudulent charges themselves; consumer-protection law makes the card issuer responsible for those.

HO 04 77 — Ordinance or Law Increased Amount

Raises the ordinance-or-law limit from the automatic 10% of Coverage A to 25%, 50%, or 100%, covering the increased cost to rebuild to current building codes. Critical for older homes that predate modern code.

HO 04 54 — Earthquake

Adds the otherwise-excluded earth movement peril:

• A 72-hour event window — all shocks within 72 hours count as one occurrence/one deductible
• The deductible is a percentage of Coverage A (commonly 5%, 10%, or 15%), not a flat dollar amount
• It does NOT cover flood, tidal wave, or tsunami that follows the quake — that is still a flood loss

Flood — Separate NFIP or Private Flood

Flood is never an HO endorsement. Key NFIP facts to memorize:

Properties in a Special Flood Hazard Area (SFHA) with a federally backed or federally regulated mortgage are required by federal law (the National Flood Insurance Act and the Flood Disaster Protection Act) to carry flood insurance. Higher values above the NFIP cap use excess/private flood.

Other Frequently Tested Endorsements

HO 00 15 — Special Personal Property (Open Perils Contents)

Adding the HO 00 15 endorsement to an HO-3 upgrades Coverage C from named perils to open perils, effectively converting the contents portion of an HO-3 into HO-5-equivalent coverage. It is the endorsement route to broad contents protection when the carrier prefers the HO-3 base form. Distinguish it from HO 04 90, which changes only the valuation (ACV to RCV) — the two are often paired in answer choices to test whether the candidate knows perils versus valuation.

Selecting Endorsements From a Fact Pattern

Match the gap in the base form to the correct add-on:

Endorsement Exam Strategy

Three principles answer most endorsement questions. First, valuation endorsements (HO 04 90, HO 04 81) change how much is paid; peril endorsements (HO 00 15, HO 04 54, HO 04 95) change what is covered; scheduling (HO 04 65) does both for listed items. Second, flood is always separate — never an HO endorsement, and the NFIP Dwelling Form caps are $250,000 building / $100,000 contents with a 30-day wait. Third, when a question lists a high-value item plus the phrase "mysterious disappearance" or "agreed value," the answer is almost always scheduling on HO 04 65, because no base-form coverage offers either feature.