4.1 Homeowners Forms HO-2 through HO-8 and Eligibility
Key Takeaways
- HO-3 (Special Form) is the market standard: open perils on the dwelling/other structures, named perils on personal property
- HO-5 (Comprehensive Form) is open perils on both building and contents — broadest unscheduled coverage and most expensive
- HO-4 is the renters form (contents + liability, no Coverage A); HO-6 is the condo unit-owners form with limited 'walls-in' building coverage
- Open perils shift the burden of proof to the insurer to show an exclusion; named perils require the insured to prove a listed cause
- HO-8 (Modified Coverage) insures older/historic homes on a functional replacement cost basis when replacement cost far exceeds market value
The Insurance Services Office (ISO) publishes the standardized homeowners (HO) program that nearly every state exam tests. The current edition most carriers file is the HO 2011 program (forms revised again in regional 2022 filings), but the form numbers and their roles are stable enough that the exam tests the framework, not the edition date.
For each form, learn exactly two things: who is eligible to buy it, and the peril basis it uses. Peril basis is the single most-tested concept in the entire personal-lines section.
The Six Current ISO Homeowners Forms
| Form | ISO Name | Dwelling (Cov A/B) | Contents (Cov C) | Intended Insured |
|---|---|---|---|---|
| HO-2 | Broad Form | Named perils | Named perils | Budget owner-occupant |
| HO-3 | Special Form | Open perils | Named perils | Typical owner-occupant |
| HO-4 | Contents Broad Form | None | Named perils | Renter / tenant |
| HO-5 | Comprehensive Form | Open perils | Open perils | High-value home, max breadth |
| HO-6 | Unit-Owners Form | Limited 'walls-in' | Named perils | Condominium owner |
| HO-8 | Modified Coverage Form | Named perils | Named perils | Older / historic home |
HO-1 (Basic Form) is effectively obsolete and unavailable in most states. If it appears as a distractor, it is almost always the wrong answer unless the question names it explicitly.
Open Perils vs. Named Perils — Burden of Proof
This distinction governs who must prove the claim:
- Named perils (HO-2, contents of HO-3, HO-4, HO-6, HO-8): the insured must prove the loss arose from a peril on the list. An unlisted cause means no coverage.
- Open perils (also called special or all-risk): the dwelling of HO-3 and everything in HO-5. Coverage applies to any cause except those specifically excluded, and the insurer carries the burden of proving an exclusion to deny the claim.
Exam Tip: "Open perils" never means "everything is covered." Exclusions still apply. It means the burden shifts to the carrier.
HO-3 — The Market Standard
HO-3 (Special Form) is the default answer to any "most common" or "typical homeowner" question. It pairs open perils on the structure (Coverages A and B) with named perils on personal property (Coverage C). This split holds premiums below an HO-5 while still giving broad building protection.
HO-5 — Broadest Unscheduled Coverage
HO-5 (Comprehensive Form) upgrades contents to open perils. If a single expensive item is mysteriously damaged, the insured need not prove a named cause; the insurer must prove an exclusion. HO-5 costs more and targets higher-value homes.
HO-4 (Renters) and HO-6 (Condo)
For a renter, the landlord insures the building, so HO-4 covers only personal property, loss of use, and liability — no Coverage A.
For a condominium owner, the homeowners association (HOA) master policy insures the building exterior and common areas, while HO-6 covers the unit interior, owner-installed improvements ('walls-in'), contents, and loss assessment (the owner's share of a master-policy deductible or shortfall). The HO-6 default Coverage A limit is modest (commonly $5,000) and is raised by endorsement to match the master policy form (bare-walls, single-entity, or all-in).
HO-8 — Older and Historic Homes
HO-8 (Modified Coverage Form) solves the problem of a home whose replacement cost (rebuilding with original craftsmanship) far exceeds its market value. Rather than recreate hand-carved molding, HO-8 settles on a functional replacement cost basis using modern equivalent materials, written on a named-peril basis.
Exam Trap: For a historic home where replacement cost greatly exceeds market value, the answer is HO-8 — not HO-3 or HO-5.
Eligibility Basics
- Owner-occupant of a 1-to-4 family dwelling: HO-2, HO-3, or HO-5.
- A home occupied by tenants (not the owner): not HO-eligible; use a Dwelling (DP) policy instead.
- Manufactured/mobile homes: not standard-HO eligible; written with a mobile-home endorsement (historically HO-7).
Which homeowners form provides open-peril coverage on the dwelling but named-peril coverage on personal property?
An owner of an 1890 Victorian finds replacement cost greatly exceeds market value. The most appropriate form is:
Eligibility, Owner-Occupancy, and Form Selection
Homeowners forms carry eligibility rules the exam tests directly. The standard package requires an owner-occupied one-to-four-family dwelling; investment property and most seasonal or vacant structures are written on Dwelling (DP) forms instead.
| Form | Eligible insured | Peril basis |
|---|---|---|
| HO-2 | Owner-occupant | Named peril (broad) on dwelling and contents |
| HO-3 | Owner-occupant | Open peril dwelling, named peril contents |
| HO-4 | Renter / tenant | Named peril contents only (no dwelling) |
| HO-5 | Owner-occupant (premium) | Open peril on both dwelling and contents |
| HO-6 | Condo unit owner | Named peril contents; limited Coverage A |
| HO-8 | Owner of older/historic home | Named peril, ACV / functional settlement |
Two selection rules recur on the exam. First, a renter who needs contents coverage buys HO-4, never an HO-3, because there is no insurable dwelling interest. Second, an owner of a historic home whose replacement cost far exceeds market value uses HO-8, which settles on ACV or functional replacement to avoid the moral hazard of overinsuring to rebuild ornate features.
The Special-Form Burden of Proof and HO-5 vs. HO-3
The peril basis of each homeowners form determines who must prove what, which the exam tests directly.
| Form | Dwelling basis | Contents basis |
|---|---|---|
| HO-2 | Named peril | Named peril |
| HO-3 | Open peril | Named peril |
| HO-5 | Open peril | Open peril |
| HO-8 | Named peril | Named peril |
Exam Trap: The only structural difference between HO-3 and HO-5 is the contents basis - HO-5 upgrades personal property to open peril, so a mysterious disappearance or accidental damage to belongings is covered under HO-5 but not under HO-3 (where contents remain named-peril). Choosing HO-5 matters most for high-value, hard-to-trace personal property.