4.1 Homeowners Forms HO-2 through HO-8 and Eligibility

ISO publishes standardized homeowners forms in the HO 00 series (current editions are generally the HO 00 0X 05 11 family, with HO 00 03 05 11 the Special Form). The exam tests two facts about each form: who it is written for, and the peril basis of the building versus the contents. Open perils (also called special or all-risk) cover any cause of loss unless excluded; named perils cover a loss only if its cause appears on a list. Memorize the table below cold.

All Current HO Forms at a Glance

Exam Tip: HO-1 (Basic Form) is obsolete in most states. If it appears as a distractor it is wrong unless the question explicitly names it.

Open Perils vs. Named Perils: the Burden of Proof

The peril basis decides who must prove the claim, a favorite exam point:

• Named perils (HO-2; contents of HO-3, HO-6, HO-8; HO-4): the insured must prove the loss was caused by a peril on the list. No listed cause means no coverage.
• Open perils / special (dwelling of HO-3, all of HO-5): coverage applies to any cause except those excluded, so the insurer must prove an exclusion to deny. This shifts the advantage to the insured and is why HO-5 costs more than HO-3.

HO-3, the Workhorse

HO-3 answers any "most common" or "standard" homeowners question. It pairs open perils on the structure (Coverages A and B) with named perils on contents (Coverage C). The split keeps premiums below HO-5 while still giving broad building protection, exactly the value most buyers want.

HO-4 (Renters) and HO-6 (Condo)

For a condo, the association's master policy insures the building exterior and common areas; the HO-6 covers the unit interior, owner-installed improvements, contents, and loss assessment, the owner's share of a master-policy deductible or shortfall. A master policy can be written bare walls, single entity, or all-in, which directly changes how much Coverage A the HO-6 owner needs.

HO-8, Older and Historic Homes

HO-8 solves the home whose replacement cost (rebuilding with original craftsmanship) vastly exceeds market value. Instead of recreating hand-carved molding, HO-8 settles on a functional replacement cost basis using modern equivalent materials, on a named-peril basis.

Exam Trap: Never pick HO-3 or HO-5 for a historic home where replacement cost greatly exceeds market value. The intended answer is HO-8.

Eligibility Rules

The standard HO program is for an owner-occupied dwelling of 1 to 4 families where the named insured lives in at least one unit (HO-3, HO-5). Key boundaries the exam tests:

• A dwelling rented to others or vacant/under construction belongs on a Dwelling Policy (DP), not an HO form.
• Mobile/manufactured homes are ineligible for a standard HO and require a mobile-home endorsement (historically the HO-7 designation).
• Farms and commercial occupancies are excluded; incidental occupancies (a home office, one or two roomers) can be endorsed back.
• A renter with no ownership interest uses HO-4; a condo unit owner uses HO-6.

Incidental business use is allowed up to limited Coverage C sublimits unless an endorsement raises them.

Matching the Applicant to the Form

Exam questions usually describe an applicant and ask for the correct form. Work it in two steps: first who (owner, renter, condo owner, historic-home owner), then how broad (budget named-peril vs. broad open-peril).

An ordinary owner who wants standard coverage gets HO-3; one who insists on open perils for valuables and accepts a higher premium gets HO-5; the cost-conscious owner who accepts named perils gets HO-2. A renter is always HO-4, a condo owner always HO-6, and a home whose replacement cost far outruns market value points to HO-8. Reading the fact pattern for occupancy and peril preference answers nearly every forms question on the test.

HO-2 and the Eligible-Dwelling Test

The HO-2 (Broad Form) insures both the dwelling and personal property on a named-peril basis using the same broad list as the contents of an HO-3, and is chosen when an owner-occupant wants budget coverage without open-peril dwelling protection. Across all owner forms, eligibility requires an owner-occupied one- to four-family dwelling used primarily for private residential purposes; incidental business occupancies (a small office) are permitted, but predominantly commercial use disqualifies the risk and pushes it to a commercial or dwelling-fire policy.