HO8 Home Insurance Policy Guide • Benzinga

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If you have an older home and are looking for home insurance, you may find it difficult to get a standard policy. What you need is an HO8 home insurance policy. Different from standard HO3 or HO5 homeowner policies, an HO8 is designed specifically for older homes.

If your home is 40 years or older, is a historic monument, or is made from hard-to-find materials, then an HO8 home insurance policy is right for you. Why an HO8? Because generally speaking, if something happens to your historic home, the repairs will cost more than the current market value of your home. An HO8 policy covers circumstances where replacement costs can be prohibitive.

Older homes require special and constant care. Sometimes the materials are hard to find and can be expensive. Older homes often do not comply with the code and require a specific type of insurance.

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Key points

  • HO8 insurance is coverage for older and historic homes where the homeowner is not eligible for standard insurance.
  • HO8 policies only cover the 10 basic risks, unlike HO2, HO3 and HO5 policies which cover 16 risks.
  • Homes that match the HO8 insurance profile do so not only because of their age, but because their actual cash or resale value is less than the replacement cost.

What is an HO8 policy form?

An HO8 home insurance policy, also known as a modified form of coverage, is home insurance designed specifically for older homes, such as a historic monument. Similar to HO2, HO3, and HO5 insurance, HO8 is a named risk policy. Perils refer to the type of action required to force an action.

With a named risk policy, it is the insurer, and not the policyholder, who specifies the risks of the coverage. Unlike HO2 and HO3 home insurance which covers 16 basic perils, HO8 policies cover losses caused by only 10 basic perils. Not only does an HO8 policy cover less risk, it could also fail if a disaster hits your home. In addition to the housing cover itself, the HO8 covers loss of personal property and liabilities, but not as extensively as an HO3 or HO5 policy.

When are HO8 policies typically used?

It is true that HO8 policies are used to insure older homes, but it’s not just the age of the home that is decisive. HO8 insurance is modified coverage, most often used when the repair or replacement value is greater than the actual value of the home. It turns out that old and historic homes fall into this category.

As well as being upside down when it comes to the home’s actual replacement / cash value, older homes often don’t comply with the code. For this reason, they sometimes don’t even qualify for standard insurance coverage. In such cases, an HO8 policy is required.

What do HO8 policies cover?

HO8 insurance policies cover older and historic homes where the replacement value may be greater than the home’s actual value, or where they may not be up to code. Older homes are often not updated and therefore do not conform to modern codes. For this reason, they are not eligible for standard HO3 or HO5 insurance.

An HO8 insurance policy covers the replacement value of your old or historic home. Because the way the home was built – and the materials that were used – may not be reasonably priced, HO8 policies are based on actual cash value, not replacement value. It is not reasonable to assume that exact replacement of older materials will be affordable or even available.

HO8 policies cover the 10 basic risks such as wind, fire and theft. They pay the actual value in cash for damage to your home as well as your belongings, liability and loss of use. Specific covers include:

  • Housing and other structures: HO8 policies pay not only for your primary home, but also for other structures on your property like garages, sheds, and fences.
  • Personal property: Personal property covered by an HO8 policy includes electronics, furniture and clothing. Although jewelry is covered, there are limits to the redemption value.
  • Liability coverage: Much like automobile liability, an HO8 policy includes protection for the owner if a guest is injured on the property. Liability coverage includes legal costs for the owner and medical costs for the injured party.
  • Loss of use: Additional living expenses are covered in the event the owner has to live elsewhere during the home restoration period.

What do HO8 policies not cover?

HO8 policies only cover the 10 basic risks. Other items not covered by an HO8 policy include:

  • Earthquake damage
  • Flood damage
  • Types of water damage, including flooding
  • Intentional loss
  • War
  • Neglect or maintenance issues
  • Wear over time
  • Electrical failure
  • Pest or mold infestations

While these items are not covered by an HO8 policy, you can add additional coverage.

What risks are covered by an HO8 policy?

HO8 insurance is a named risk policy, which means it only covers what is explicitly stated in the policy. Unlike standard HO2, HO3 and HO5 insurance policies which cover 16 risks, HO8 policies only cover the 10 basic risks. These risks include:

  1. Fire or lightning
  2. Windstorm or hail
  3. Explosion
  4. Riot or civil unrest
  5. Aircraft damage
  6. Damage caused by vehicles
  7. Smoke
  8. Vandalism
  9. Flight
  10. Volcanic eruption

In this regard, an HO8 policy is much more like an HO1 than a standard HO3 or HO5: just the basics. HO8 policies do not cover aspects such as HVAC, electrical, plumbing, and roofing as they may well be outdated and not conform to modern codes.

What perils HO8 policies do not cover

Some of the risks covered by an HO3 or HO5 policy, but not covered by an HO8, include:

  • Falling objects
  • Ice and snow weight
  • Accidental water overflow
  • Sudden or accidental tear
  • Frozen
  • Accidental damage from electric current

Other HO8 exclusions often include losses due to mold, government actions, and general wear and tear, although these can be covered by adding additional policies.

Replacement cost coverage and HO8 policies

The purpose of HO8 insurance is to replace damaged homes and personal effects. However, since HO8 policies specifically cover older homes, it is unreasonable to assume that these older parts and materials can be replaced with the exact same parts at an affordable price, if at all.

Replacement cost means restoring full value to property damaged before the event, but if you have a house built before the Civil War – or even the American Revolution – that just won’t be possible. Therefore, the actual replacement cost of an HO8 home can only be calculated using the actual cash surrender value and modern parts that can best be used to make the property as good as possible.

How to Compare and Get an HO8 Insurance Policy

When do you need an HO8 insurance policy? If you own a home that is over 40 years old, you may not be eligible for standard HO3 or HO5 insurance. If your home is historic or even over 40 years old, you will need an HO8 policy. However, there are exceptions to the rule.

If you upgrade the home and bring the electrical wiring, plumbing, HVAC systems, and roofing up to today’s code, you may be able to bypass an HO8. You will also need to show that the materials needed for the reconstruction will not be prohibitive.

Compare home insurance

Still looking for an HO8 home insurance policy? Come compare the rates of these major companies and find the policy that’s right for you.

HO8 Homeowners’ Insurance Policies for Older Homes

If you have an older or historic home, you will need HO8 home insurance. Your home doesn’t have to be 18th or 19th century to qualify, only 40 or older. HO8 insurance policies are tailor-made for such homes.

Maybe your old house is made of materials that are not readily available today, or old world craftsmanship that would make rebuilding prohibitive under a standard insurance policy. If so, an HO8 insurance policy guarantees that your old or historic home can be rebuilt, if not exactly as it was before, to the best of its ability using modern materials.

For more information on home insurance, check out these informative articles on home insurance from Benzinga.

Frequently Asked Questions

What type of insurance is an HO8 policy?

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What type of insurance is an HO8 policy?

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Philip Loyd, Licensed Insurance Agent

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HO8 insurance policies are modified versions for homeowners who are otherwise unable to obtain a standard HO3 or HO3 policy. They cover homes ages 40 and up and may include structures that have not been updated to code or that are built with hard to find and expensive materials.

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Benzinga

Do HO8 policies include replacement costs?

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Do HO8 policies include replacement costs?

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Philip Loyd, Licensed Insurance Agent

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Since HO8 homes are older and may have been built in such a way and with such materials that cannot be replaced using the actual cash value model, replacement value is not a viable option. Replacements are made instead with cheaper, more modern parts.

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Benzinga

Why are things like HVAC, electrical, plumbing and roofing not covered by an HO8 policy?

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Why are things like HVAC, electrical, plumbing and roofing not covered by an HO8 policy?

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Philip Loyd, Licensed Insurance Agent

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The reason items like these aren’t covered by an HO8 insurance policy is because the house is older and there’s a good chance it hasn’t been updated. Electrical wiring that can burn down the house or pipes that could burst and flood the house may not comply with today’s code and therefore cannot be insured.

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