Homeowners Policy
Forms and Coverages
Homeowners forms include HO-2, HO-3, HO-5, HO-6 (condo), and HO-8 (older homes). Coverage A is the dwelling, B other structures, C personal property, D loss of use, E personal liability, and F medical payments. Section I is property; Section II is liability.
Valuation and Conditions
HO-3 covers the dwelling on an open-peril basis and personal property on a named-peril basis. HO-5 covers both on an open-peril basis. Replacement cost is standard on the dwelling; contents may be actual cash value unless endorsed. The policy includes duties after loss, appraisal, and a mortgage clause.
Traps
Questions often confuse HO-3 and HO-5 personal property coverage or assume HO-6 covers the building's common elements. Another trap is treating medical payments as requiring negligence; it does not. Also watch for the special limits on jewelry, cash, and silverware.
Rule of Thumb
For condo owners, HO-6 covers the unit interior and personal property, while the association covers common elements.
Worked Example
An HO-3 insured loses $5,000 in jewelry. Special limits may cap recovery well below that amount unless scheduled. The adjuster must apply the special limit and advise on scheduling.