HO-8 Policy

An HO-8 policy, also called the Modified Coverage Form, is home insurance for older buildings where the replacement costs potentially outweigh the market value.

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What Is an HO-8 Form?

HO-8 policy, also called the Modified Coverage Form, is home insurance for older buildings where the replacement costs potentially outweigh the market value. 

What Homeowners Need to Know about the HO-8 Policy

The HO-8 policy is usually reserved for owner-occupied homes when an actual cash value (ACV) is less than what it might cost to replace the damaged structure. Insurers typically use HO-8 forms to insure:

  • Older homes, especially ones more than 40 years old.
  • Registered landmarks.
  • Architecturally significant homes.
  • Homes constructed of hard-to-replace materials.

HO-8 policies may subtract depreciation when it pays out for damage. That cost is usually much smaller than the replacement cost, so your insurance company pays less after a loss. That keeps the overall cost of the HO-8 policy down. The policy also offers other important coverages for:

  • Personal liability
  • Third-party medical expenses
  • Personal property

What Perils Does an HO8 Policy Cover?

The HO-8 form is a named-perils policy. Like HO-1, HO-8 only covers a loss if it’s caused by one of the 10 events listed in the policy. These events, or perils, are:

  • Fire or lightning
  • Hail or windstorms
  • Explosions
  • Riots or civil commotion
  • Damage from aircrafts
  • Damage from vehicles
  • Smoke
  • Malicious mischief or vandalism
  • Theft
  • Volcanic eruptions

These perils represent some of the most common claims a homeowner may face. However, an HO-8 policy does not cover other perils that can cause expensive damage, such as:

  • Water damage. Few home insurance policies cover water damage from flood, but HO-8 also excludes damage caused by a burst pipe or other sudden and accidental events. For that, you may want an HO-3 policy.
  • Earthquake. There are no standard home insurance policies that cover earth movement of any kind. Typically, homeowners look for additional coverage specially designed for earthquake.
  • Falling objects. HO-8 does not provide coverage for falling objects, like a tree branch crashing through your roof, unless you can prove the object fell because of one of the 10 covered perils.  

When considering an HO-8 policy, be sure to tell you agent about your home and the risks you face. They can help you choose the policy that fits you. 

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