PROPERTY POLICIES · 5 MIN READ

Homeowners Forms and the A Through F Structure

Every ISO Homeowners policy is built on the same six-letter skeleton. Section I contains the property coverages: Coverage A insures the dwelling itself, Coverage B insures other structures on the premises (detached garages, fences, sheds), Coverage C insures personal property, and Coverage D pays Loss of Use. Section II contains the liability coverages: Coverage E is Personal Liability and Coverage F is Medical Payments to Others. Coverage D deserves special attention because it is the one candidates most often misplace: when a covered loss makes the residence uninhabitable, Coverage D pays Additional Living Expense to maintain the household's normal standard of living, plus Fair Rental Value for any portion of the residence that was rented to others. It also has a civil-authority trigger when access is prohibited because of damage to neighboring property. The individual forms differ mainly in what perils apply to which property. HO-2 is a broad named-perils form on both dwelling and contents. HO-3, the workhorse form, covers the dwelling and other structures on an open-perils basis while keeping personal property on named perils. HO-5 upgrades personal property to open perils as well. HO-4 is the tenant's contents form (broad named perils, no Coverage A dwelling exposure), and HO-6 is the condominium unit-owner's form. HO-7 adapts the program to mobile and manufactured homes, with physical-construction adjustments such as tie-down requirements, and HO-8 is the modified form for older homes whose replacement cost far exceeds market value, settling losses on a repair-cost or functional basis rather than full replacement cost. HO-6 has its own scaling logic that the exam loves. The unit owner's Coverage A insures only the owner's interest in building items: improvements, alterations, fixtures, and anything the association's master policy leaves to the unit owner. Unendorsed, it carries only a small default limit, so when the master policy is written on a bare-walls basis the owner must increase Coverage A to cover cabinetry, flooring, and finishes. Coverage D on the HO-6 is set at 50 percent of Coverage C, not a percentage of Coverage A, because Coverage A on a condo form is often too small to be a sensible base.