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What Is an HO8 Policy?

HO8 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 HO8 Policy

The HO8 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 HO8 forms to insure:

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

HO8 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 HO8 policy down. The policy also offers other important coverages for:

What Perils Does an HO8 Policy Cover?

The HO-8 form is a named-perils policy. Like HO1, HO8 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 HO3 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. HO8 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 HO8 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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