What is HO-8 insurance?

When searching for home insurance, you may have found there are multiple policy types that are available. The policy types are typically written as a combination of letters and numbers, like HO-3 or HO-8. The initials of “HO” stand for homeowners. The varying types of coverage for condos, standard homes or mobile/manufactured housing determine the number that follows. These different policy types vary in the types of homes they cover, the coverage provided and how perils or losses may be covered.

What is HO-8 insurance? An HO-8 insurance policy usually refers to coverage for an older home or one deemed historical. However, just because you live in an older house does not necessarily mean you don’t qualify for a standard, possibly more affordable HO-3 or HO-5 policy. Knowing the difference between these policies may help you know which policy best meets your needs.

What is an HO-8 policy?

An HO-8 policy is often referred to as a modified coverage form. HO-8 insurance has a unique aspect — the repair/replacement cost may be higher than the home’s resale value. Older or historical homes and those listed as registered landmarks often fit the bill as they may cost more to rebuild to a pre-loss condition than a typical modern home. They may not have been updated over time and could potentially be out of code (based on modern standards). As a result, they may not qualify for a more standard homeowners insurance policy.

When you buy HO-8 insurance coverage, your home is covered for named perils, which means unless the specific peril that causes the loss is listed in your policy, there is no coverage if the home is damaged. Claims are typically paid on an actual cash value basis, which takes depreciation and wear and tear into account when determining monetary damages. If you are considering an HO-8 home insurance policy, working with a licensed insurance agent could help you get the proper coverage and understand the limitations your policy may have if you file a claim.

What does HO-8 insurance cover?

An HO-8 insurance policy covers fewer named perils than a standard HO-3 policy. HO-8 insurance policies typically cover a specific subset of homes that may not be able to get coverage under other policy forms.

Homes older than 40 years

An HO-8 policy may cover dwellings that are 40 years or older. Age is not the only determining factor though, so just because your home is older, it may still qualify for an HO-3 policy. However, older homes may not qualify for a standard HO-3 because of issues such as outdated plumbing materials or old electrical wiring. Outdated wiring may need a major update to reduce the risk of fire and can therefore push the house out of qualifying for a standard homeowners policy.

Historical houses

If you own a historical home, such as one listed in the National Register of Historic Places, an HO-8 may be the best option for home insurance. Historic homes and homes that are denoted as registered landmarks are usually more expensive to repair and/or rebuild. Many historical districts set limits to what types of building materials can be used to keep the area original. Costs may be higher because more expensive specialized laborers may have to do the work using potentially pricier building materials.

10 Named perils

An HO-8 policy names 10 specific perils. If the cause of loss is a peril listed in the policy, then coverage applies. If the cause of loss is not included, then no coverage applies. Conversely, a standard HO-3 policy covers the dwelling and other structures on an open-peril basis. This means that all perils are covered unless the cause of loss is specifically listed as an exclusion in the policy. HO-8 insurance will typically cover losses caused by:

• Aircraft
• Civil unrest/riots
• Explosions
• Fire or lightning
• Hailstorms and windstorms
• Smoke
• Theft
• Vandalism/malicious mischief
• Vehicles
• Volcanic eruptions

Losses not on this list will not be covered.

What does HO-8 insurance not cover?

As mentioned, an HO-8 policy only covers 10 perils, compared to the open-peril coverage provided by a standard  HO-3 policy. Some examples of perils that would not be covered on an n HO-8 insurance policy include:

• Falling objects
• Weight of snow, ice or sleet
• Power surges or short circuiting
• Freezing pipes
• Water damage caused by heating, air conditioning or plumbing overflow or failure
• Sudden cracking or tearing of home appliances (plumbing, heating, etc.)

Earthquakes

Earthquakes and seismic activity are not typically covered under an HO-8 or standard HO-3 policy. However, depending on your state, the insurance company and the homeowners policy type, you may be able to add a coverage endorsement or purchase a separate earthquake insurance policy.

Falling objects

If a tree branch breaks and falls on your home, damaging the structure or other structures on your property, it would be covered in a standard HO-3 policy. However, an HO-8 does not cover falling objects, so this peril would not be covered if your home is insured using an HO-8 policy form.

Water damage

A standard HO-3 policy will typically include some water damage coverage, but usually excludes damage from flooding or sewer backup. An HO-8 policy does not include coverage for water damage including damage caused by sudden events such as burst pipes.

Is an HO-8 policy right for me?

As a modified policy form with named peril coverage, an HO-8 policy may not be the preferable option, especially if you could qualify for an HO-3 or HO-5 policy. Sometimes  an HO-8 policy may be the only available option if you live in a home that is over 40 years old with older heating, plumbing and electrical systems. This may also include homes that are registered landmarks or historic homes with restoration requirements or code violations that may disqualify them from a standard homeowners insurance policy.

If you have been denied standard homeowners insurance coverage for reasons such as having an older home with outdated fixtures or appliances, companies that offer HO-8 insurance policies may be able to provide coverage. A person considering an HO-8 policy should be aware of the homeowners perils covered and not covered under the policy form. Working with a licensed insurance agent may help you determine which homeowners policy type is best for your home’s characteristics and insurance needs.

Frequently asked questions

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    What is the difference between an HO-3 vs. an HO-8?

    The difference between HO-8 and HO-3 insurance policy types is the way in which perils are covered. In an HO-8 policy, there is only coverage for 10 named perils, while an HO-3 policy provides coverage for all perils except listed exclusions. An HO-8 policy also covers claims on the dwelling and personal property on an actual cash value basis, whereas an HO-3 typically covers the dwelling and other structures with  replacement cost coverage while personal property has the option to be covered on either a replacement cost or actual cash value basis.
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    How are HO-8 claims paid?

    HO-8 claims are typically paid out on an actual cash value basis. Actual cash value means that HO-8 insurance companies will usually adjust what is owed to you by subtracting depreciation from the replacement cost of your home. Working with a licensed insurance agent may help you understand what implications actual cash value may have for your home in the event of a covered peril.
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    What type of home insurance do I need for a historical home?

    The type of home insurance you need for a historical home will likely depend on where it is located and the type of coverage you desire. If your home is historical and listed in the National Register of Historic Places, an HO-8 policy may be the best type of policy to provide adequate coverage. By speaking with a licensed insurance agent and gathering quotes from a few companies, you can compare options to find the best policy for your needs.