Conceptin Homeowners insurance
Drill7 items
HO-3 vs HO-5, plus HO-2, HO-4, HO-6 and HO-8
The HO-3 and the HO-5 insure the house the same way, on open perils; they part ways on Coverage C. The 2011 ISO HO-3 covers personal property only against 16 named perils, while the HO-5 puts contents on open perils too. The other homeowners forms (HO-2, HO-4, HO-6 and HO-8) differ by who owns the building and how many perils apply.
HO-3 and HO-5 side by side
| Coverage | HO-3 | HO-5 | ≠ |
|---|---|---|---|
| Coverage A, dwelling | Open perils | Open perils | same |
| Coverage B, other structures | Open perils | Open perils | same |
| Coverage C, personal property | 16 broad named perils | Open perils | differs |
| Burden on a contents loss | The insured shows a named peril caused it | The insurer must show an exclusion applies | differs |
| Section II, Coverages E and F | Included | Included | same |
marks a row where the two differ.
Why Coverage C decides the pair
On the HO-3, a contents loss has to fit one of the 16 perils in the 2011 form: fire or lightning; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism or malicious mischief; theft; falling objects; weight of ice, snow or sleet; accidental discharge or overflow of water or steam; sudden and accidental tearing apart, cracking, burning or bulging; freezing; sudden and accidental damage from artificially generated electrical current; and volcanic eruption. A cause outside that list leaves the property unpaid, however accidental the event.
A loss the list does not reach
A ceiling fan works loose and drops onto a walnut dining table. Falling objects looks like the answer until you read the peril: in the 2011 HO-3 it covers property inside a building only if the falling object first damages the roof or an outside wall. The table fails that test. Under the HO-5 the same loss starts as covered and stays covered unless the insurer can point to an exclusion.
The dwelling column rarely separates the two forms, because Coverage A on both insures against direct physical loss unless excluded. On the house, the exclusions do the deciding instead: wear and tear, settling, birds, rodents or insects, flood and earth movement among them. The general rule behind both columns is on named perils vs open perils.
Check the list before the forms
When a stem names a cause of loss to contents, hold it against the 16 perils first. If the cause is on the list, the HO-2, HO-3 and HO-5 all respond, and the deciding point lies elsewhere, such as a special limit or an exclusion. If it is missing from the list, only the HO-5 is left among those three.
Valuation is a separate question from perils. Unendorsed, the HO-3 settles personal property at actual cash value (ACV) even when the dwelling gets replacement cost (RC); see ACV vs replacement cost for how the two are figured.
Pick the homeowners form
0 of 7 answered · 0 right
Pin down two things before choosing a form: what was damaged (the structure, the contents, a unit, a renter's belongings) and what caused it. The property tells you which coverage applies; the cause tells you whether named or open perils matter.
Notes on each optionCommit to an answer first. The notes under the item then open on every option: what rules it in or out, and the one word that splits the runner-up from the key.
- Item 01
Which homeowners policy form provides the most comprehensive coverage for both dwelling and personal property?
- ACorrect: the HO-5 covers both the dwelling and personal property on an open-perils basis.
- BThe HO-8 is the narrowest form, covering only basic named perils for older homes.
- CThe HO-2 covers both the dwelling and personal property only for named broad perils.
- DThe HO-3 covers the dwelling on open perils but personal property only for named perils.
- Item 02
Nadia accidentally spills bleach on her expensive rug. Under which homeowners form would the rug damage be covered?
- AThe HO-8 covers personal property only for basic named perils, and a spill isn't one.
- BCorrect: the HO-5 insures personal property on open perils, so an accidental spill is covered unless excluded.
- CThe HO-3 covers personal property only for named perils; its open-perils coverage is for the dwelling.
- DThe HO-2 covers personal property only for named broad perils, and a spill isn't one.
- Item 03
While moving furniture, Hank accidentally punches a hole in his living room wall. Under which homeowners form would the wall damage be covered?
- AThe HO-8 covers the dwelling only for basic named perils, and accidental damage by the insured isn't one.
- BCorrect: the HO-3 covers the dwelling against open perils, so accidental damage is covered unless excluded.
- CThe HO-4 doesn't insure the dwelling at all; it is a renters form.
- DThe HO-2 covers the dwelling only for named perils, and accidental damage by the insured isn't one.
- Item 04
Which coverage is NOT part of an unendorsed ISO HO-4 (renters) policy?
- ACorrect: the HO-4 is a tenants form, so it has no Coverage A; the building belongs to the landlord.
- BPersonal property is the core of the HO-4, so it can't be the NOT answer.
- CThe HO-4 includes full Section II personal liability, so it can't be the NOT answer.
- DThe HO-4 includes loss of use, set at 30% of Coverage C, so it can't be the NOT answer.
- Item 05
Jen buys her first home, a unit in a condominium building. Which homeowners form is designed for her?
- ACorrect: the HO-6 is the condominium unit-owners form, covering her personal property and the parts of the unit she must insure.
- BThe HO-4 is for tenants who own no part of the building.
- CThe HO-5 insures a whole dwelling the insured owns, which the association insures here.
- DThe HO-3 insures a whole dwelling the insured owns, which the association insures here.
- Item 06
The Parks own an 1890s Victorian home whose ornate plaster would cost far more to replace than the home's market value. Under an HO-8, how are dwelling repairs settled?
- ACorrect: the HO-8 pays for repairs using common construction materials and methods that are functionally equivalent.
- BLike kind and quality is the HO-3 replacement cost standard, which is what makes these homes hard to insure on an HO-3.
- CAgreed value isn't how the HO-8 settles dwelling repairs.
- DMarket value can come into play only when the home isn't repaired; repairs are settled with functionally equivalent materials.
- Item 07
Arturo's older home is insured under an HO-8. Which loss is NOT covered?
- ACorrect: freezing and accidental discharge of water are broad perils, and the HO-8 covers only basic named perils.
- BTheft is an HO-8 peril, limited to $1,000 and to the residence premises, and a TV in the living room is on premises.
- CSmoke is a basic named peril that the HO-8 covers.
- DVandalism is a basic named peril that the HO-8 covers.
The rest of the homeowners family
| Form | Written for | Dwelling | Personal property |
|---|---|---|---|
| HO-2 broad | Owner-occupant | Broad named perils | Broad named perils |
| HO-3 special | Owner-occupant | Open perils | Broad named perils |
| HO-4 contents broad | Renter | None; additions and alterations at 10% of C | Broad named perils |
| HO-5 comprehensive | Owner-occupant | Open perils | Open perils |
| HO-6 unit-owners | Condo unit owner | $5,000 minimum, named perils | Broad named perils |
| HO-8 modified | Older home | Basic perils, functional repair cost | Basic perils |