An owner of a 120-year-old historic home discovers that replacement cost vastly exceeds the home's actual market value due to obsolete craftsmanship. Which ISO Homeowners form is specifically designed to address this situation by settling losses on a modified actual-cash-value basis?

Why this is the answer

The HO-8 Modified Form solves the underwriting problem where insuring an older home for full replacement cost would produce a premium dramatically higher than the home's market value and create moral hazard. HO-8 settles losses on an actual cash value or functional replacement basis (substituting common modern materials of like functionality for ornate originals) and uses a narrower named-perils trigger than HO-3 (ISO HO-8).