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Historic homes often have different coverage needs than newer builds. Homes with older plumbing and electric systems and homes of historical interest, like those on the National Register of Historic Places, are probably insured with an HO-8 policy instead of a more standard HO-3. Older homes usually pose higher risks to insurance companies because of their outdated systems, older building materials and other unique features. HO-8 insurance is designed to specifically account for those homes that may not qualify for standard coverage.
What is an HO-8 policy?
An HO-8 policy is often referred to as a modified coverage form. HO-8 insurance has a unique aspect — the repair/replacement cost of the home may be higher than its resale value. Older or historical homes and those listed as registered landmarks often fit the bill, as they may cost more to rebuild to a pre-damage condition than a typical modern home. They may not have been updated over time and could potentially be out of code (based on modern standards). As a result, they may not qualify for a more standard homeowners insurance policy.
When you buy HO-8 insurance coverage, your home is covered for named perils. This means you have coverage for the specific damage-causing events listed in your policy — you aren’t covered for anything else. Claims are typically paid on an actual cash value (ACV) basis, which takes depreciation and wear and tear into account when determining monetary damages. As such, claim payouts with ACV coverage are usually lower. If you are considering an HO-8 home insurance policy, working with a licensed insurance agent could help you get the proper coverage and understand the limitations your policy may have if you file a claim.
Historic homes with stained-glass windows and hand-carved molding may be charming, but they can also be hard to insure. The type of policy your vintage home may need will depend on the kind of repair work you will accept if your home is damaged in a covered claim. Repairs requiring special tradespeople or rare materials can push the rebuilding cost of your home past what most standard insurance companies are willing to insure, meaning you may need excess or surplus lines insurance.
— Shannon Martin, Bankrate Insurance Analyst
To help reduce your total cost of insurance for your historic home, you could consider an HO-8 policy with functional replacement cost which covers repairs or replacement done with similar material or techniques that serve the same function. With it, you may accept repairs with modern materials and techniques.
What does HO-8 insurance cover?
An HO-8 policy includes the same coverage types as a standard HO-3 home insurance policy. These include:
- Dwelling
- Covers your home’s physical structure
- Other structures
- Covers detached structures on your property, like a shed or barn
- Personal property
- Covers your belongings, like clothes, furniture and television
- Loss of use
- Pays for temporary housing, restaurant bills and other related expenses if you cannot live in your home because of a covered loss, like after a kitchen fire
- Personal liability
- If you are liable for someone else’s injuries, this coverage can help with the cost of a lawsuit, settlement, medical bills and other related expenses.
- Medical payments
- Pays for a guest’s medical bills if they’re injured at your property, even if you’re not at fault
While the structure of an HO-8 policy reflects a standard home insurance policy, exactly what it’s designed to cover is different. An HO-8 covers fewer types of damage and you may get less money when you file a claim than you would with a different type of policy.
Homes older than 40 years
An HO-8 policy may cover dwellings that are 40 years or older. Age is not the only determining factor though, so just because your home is older doesn’t mean it’ll automatically disqualify for coverage under an HO-3 policy. However, older homes may not qualify for a standard HO-3 because of issues such as outdated plumbing materials or old electrical wiring. Outdated wiring may need a major update to reduce the risk of fire and can disqualify the house for standard homeowners policy.
Historical homes
If you own a historical home, such as one listed in the National Register of Historic Places, an HO-8 may be the best option for home insurance. Historic homes and homes that are denoted as registered landmarks are usually more expensive to repair and/or rebuild. Many historical districts set limits to what types of building materials can be used to keep the area original. Rebuild costs may be higher because more expensive, specialized laborers may have to do the work with potentially pricier building materials — both of which can drive home insurance premiums up.
10 Named perils
An HO-8 policy names 10 specific perils. If the cause of loss is a peril listed in the policy, then coverage applies. If the cause of loss is not included, then no coverage applies. Conversely, a standard HO-3 policy covers the dwelling and other structures on an open-peril basis. This means that all perils are covered unless the cause of loss is specifically listed as an exclusion in the policy. HO-8 insurance will typically cover losses caused by:
- Fire or lightning
- Explosion
- Wind
- Smoke
- Hail
- Damage from aircraft
- Damage from vehicles
- Volcanic eruption
- Riots and civil unrest
- Vandalism or malicious mischief
What does HO-8 insurance not cover?
As mentioned, an HO-8 policy only covers 10 perils, compared to the open-perils coverage provided by a standard HO-3 policy. Some examples of perils that would not be covered on an HO-8 insurance policy include:
- Broken glass
- Burglary damage
- Weight of snow, ice or sleet
- Accidental discharge of water
- Freezing objects
- Falling objects
- Electrical current
- Collapse
- Sudden cracking or tearing of home appliances
- Earthquakes
- Floods
Difference between an HO-8 and HO-3 policy
The main differences between an HO-8 vs. HO-3 are the scope of coverage and how claims are paid out. With an HO-3 policy, dwelling and other structures claims are paid out at replacement cost value (RCV), meaning depreciation isn’t factored into your claim payout. These kinds of claims on an HO-8 policy would be paid out at actual cash value (ACV).
| Policy type | Dwelling | Other structures | Personal property |
|---|---|---|---|
| HO-3 | Open peril, RCV | Open peril, RCV | 16 named perils, ACV |
| HO-8 | 10 named perils, ACV | 10 named perils, ACV | 10 named perils, ACV |
Where the HO-3 policy covers the dwelling and other structures on an open-peril basis, the HO-8 does so on a named-peril basis. Under an HO-3 policy, personal property is protected from 16 named perils, while the HO-8 only accounts for 10. In addition to the perils covered by an HO-8 policy, an HO-3 policy also includes coverage from:
- Burglary damage
- Weight of snow, ice or sleet
- Accidental discharge of water
- Freezing objects
- Falling objects
- Power surge
Is an HO-8 policy right for me?
As a modified policy form with named peril coverage, an HO-8 policy may not be the preferable option, especially if you could qualify for an HO-3 or HO-5 policy. Sometimes an HO-8 policy may be the only available option if you live in a home that is over 40 years old with older heating, plumbing and electrical systems. This may also include homes that are registered landmarks or historic homes with restoration requirements or code violations that may disqualify them from a standard homeowners insurance policy.
If you have been denied standard homeowners insurance coverage for reasons such as having an older home with outdated fixtures or appliances, companies that offer HO-8 insurance policies may be able to provide coverage. A person considering an HO-8 policy should be aware of the homeowners perils covered and not covered under the policy form. Working with a licensed insurance agent may help you determine which homeowners policy type is best for your home’s characteristics and insurance needs.
Frequently asked questions
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The HO in HO-8 stands for homeowner, and the number distinguishes this type of policy from other forms of home insurance. HO-8 policies are specifically designed for older homes that have outdated construction or features that may disqualify the property from standard homeowners insurance. Not all older homes need HO-8 insurance, but many historic homes with old plumbing and wiring will only qualify for this type of coverage. The 10 covered perils under HO-8 insurance include fire, smoke and theft.
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The type of home insurance you need for a historical home will likely depend on where it is located and the type of coverage you desire. If your home is historical and listed in the National Register of Historic Places, an HO-8 policy may be the best type of policy to provide adequate coverage. By speaking with a licensed insurance agent and gathering quotes from a few companies, you may be able to compare options to find the best policy for your needs.
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There is not a standard cost for HO-8 policies. Instead, your premium is specific to your situation and will be based on a range of factors, including your home’s age, where it is located and your own claims history. To find the most affordable insurance for your older house, it may help to ask for quotes from several companies to see which might give you the lowest rate. Maintaining your home and avoiding unnecessary small claims may also help keep your rates low over time.
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