Study guide
4.2 Homeowners Policy Forms (HO-2 through HO-8)
Property & Casualty Insurance Exam
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1 Introduction
0.1 About the Property & Casualty Exam 0.2 How to Use This Course
2 Chapter 1: Insurance Fundamentals
1.1 Risk and Risk Management 1.2 Types of Risk 1.3 Principles of Insurance 1.4 The Insurance Contract 1.5 Policy Structure and Components
3 Chapter 2: Property Insurance Concepts
2.1 Property Coverage Basics 2.2 Perils, Hazards, and Exclusions 2.3 Valuation Methods 2.4 Coinsurance and Insurance to Value 2.5 Deductibles and Policy Limits
4 Chapter 3: Dwelling Policies
3.1 Dwelling Policy Overview 3.2 Dwelling Policy Forms (DP-1, DP-2, DP-3) 3.3 Dwelling Property Coverages 3.4 Dwelling Exclusions and Conditions
5 Chapter 4: Homeowners Policies
4.1 Homeowners Policy Overview 4.2 Homeowners Policy Forms (HO-2 through HO-8) 4.3 Section I: Property Coverages 4.4 Section II: Liability Coverages 4.5 Homeowners Exclusions 4.6 Homeowners Conditions 4.7 Common Homeowners Endorsements
6 Chapter 5: Personal Auto Policy
5.1 Personal Auto Policy Overview 5.2 Part A: Liability Coverage 5.3 Part B: Medical Payments Coverage 5.4 Part C: Uninsured/Underinsured Motorists 5.5 Part D: Physical Damage Coverage 5.6 PAP Exclusions 5.7 No-Fault Insurance and PIP
7 Chapter 6: Liability Insurance Concepts
6.1 Liability Insurance Basics 6.2 Negligence and Tort Law 6.3 Types of Legal Liability 6.4 Personal Umbrella Policies
8 Chapter 7: Commercial Property Insurance
7.1 Commercial Package Policy (CPP) 7.2 Building and Personal Property Coverage Form 7.3 Causes of Loss Forms 7.4 Business Income Coverage 7.5 Businessowners Policy (BOP)
9 Chapter 8: Commercial General Liability
8.1 CGL Policy Overview 8.2 Coverage A: Bodily Injury and Property Damage 8.3 Coverage B: Personal and Advertising Injury 8.4 Coverage C: Medical Payments 8.5 CGL Exclusions 8.6 CGL Limits and Conditions
10 Chapter 9: Commercial Auto Insurance
9.1 Business Auto Policy Overview 9.2 Covered Auto Designation Symbols 9.3 BAP Liability Coverage 9.4 BAP Physical Damage Coverage 9.5 Garage and Truckers Coverage Forms
11 Chapter 10: Workers Compensation
10.1 Workers Compensation Overview 10.2 Part One: Workers Compensation Insurance 10.3 Part Two: Employers Liability 10.4 Workers Compensation Exclusions 10.5 Other States and USL&H Coverage
12 Chapter 11: Other Commercial Lines
11.1 Inland Marine Insurance 11.2 Ocean Marine Insurance 11.3 Commercial Crime Insurance 11.4 Surety Bonds 11.5 National Flood Insurance Program 11.6 Professional Liability Insurance 11.7 Commercial Umbrella and Excess Liability 11.8 Boatowners and Personal Watercraft Insurance 11.9 Farm and Ranch Insurance 11.10 Mobile Home and Manufactured Housing Insurance 11.11 Title Insurance
13 Chapter 12: Insurance Regulations and Ethics
12.1 Producer Licensing 12.2 Producer Authority and Responsibilities 12.3 Unfair Trade Practices 12.4 Claims Settlement Practices 12.5 State Insurance Department 12.6 Penalties and Disciplinary Actions
4.2 Homeowners Policy Forms (HO-2 through HO-8)
Key Takeaways Explain This Topic AI
HO-3 (Special Form) is the market standard: OPEN perils on the dwelling/other structures, NAMED perils on personal property
HO-5 (Comprehensive Form) provides OPEN perils on BOTH building and contents — the broadest unscheduled coverage and the most expensive
HO-4 is renters/tenants coverage (contents + liability, no building); HO-6 is condo unit-owner coverage with 'walls-in' building property
HO-2 (Broad Form) is NAMED perils on building and contents using the same lists of perils as the contents portion of HO-3
HO-8 (Modified Coverage) insures older/historic homes on a FUNCTIONAL replacement cost basis when replacement cost far exceeds market value
Last updated: June 2026
ISO publishes standardized homeowners forms identified by number. The exam tests two things about each: (1) who it is for, and (2) the peril basis — open perils (covered unless excluded) versus named perils (covered only if the cause is listed). Learn the table below so well you can fill it from memory.
All Current HO Forms at a Glance
- Form Name Dwelling Basis Contents Basis Designed For
- HO-2 Broad Form Named perils Named perils Budget owner-occupants
- HO-3 Special Form Open perils Named perils The typical homeowner (≈79%)
- HO-4 Contents Broad No building Named perils Renters / tenants
- HO-5 Comprehensive Open perils Open perils High-value homes, max protection
- HO-6 Unit-Owners Limited (walls-in) Named perils Condominium owners
- HO-8 Modified Named perils Named perils Older / historic homes
Exam Tip: HO-1 (Basic Form) is effectively obsolete and not offered in most states. If you see it as a distractor, it is wrong unless the question explicitly references it.
Open Perils vs. Named Perils — the Burden of Proof
This distinction decides who must prove the claim:
Named perils (HO-2, contents of HO-3, HO-4, HO-6, HO-8): The insured must prove the loss was caused by a peril on the list. If the cause is not listed, there is no coverage.
Open perils / 'special' (dwelling of HO-3, all of HO-5): Coverage applies to any cause of loss except those specifically excluded . The insurer must prove an exclusion applies to deny the claim — a major advantage for the insured.
The Named-Peril List (Memorize the Categories)
The broad named-peril list used by HO-2 and the contents of HO-3 includes 16 perils:
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Aircraft
- Vehicles
- Smoke
- Vandalism or malicious mischief
- Theft
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or steam
- Sudden and accidental tearing/cracking/burning of a heating or A/C system
- Freezing of plumbing, heating, A/C
- Sudden and accidental damage from artificially generated electrical current
- Volcanic eruption
- HO-3 — The Workhorse
HO-3 is the answer to any "most common" or "standard" homeowners question. It pairs open perils on the structure (Coverages A and B) with named perils on contents (Coverage C). This split keeps premiums lower than HO-5 while still giving broad building protection — exactly the value most buyers want.
HO-5 — Broadest Unscheduled Coverage
HO-5 upgrades contents to open perils too. The practical benefit: if a single expensive item is mysteriously damaged, the insured does not have to prove a named cause; the insurer must prove an exclusion. HO-5 typically costs noticeably more and is targeted at higher-value homes.
HO-4 (Renters) and HO-6 (Condo)
- Coverage HO-4 Renters HO-6 Condo
- Building / dwelling None (landlord insures) Limited 'walls-in' (improvements you own)
- Personal property (C) Yes, named perils Yes, named perils
- Loss of use (D) Yes Yes
- Liability (E) & Med Pay (F) Yes Yes
For a condo , the HOA's master policy insures the building exterior and common areas; the HO-6 covers the unit interior, owner-installed improvements, contents, and loss assessment (the owner's share of a master-policy deductible or shortfall).
HO-8 — Older and Historic Homes
HO-8 solves the problem of a home whose replacement cost (rebuilding with original craftsmanship) vastly exceeds its market value . Instead of paying to recreate hand-carved molding, HO-8 settles on a functional replacement cost basis using modern equivalent materials, and is written on a named-peril basis.
Exam Trap: Do not pick HO-3 or HO-5 for a historic home where replacement cost greatly exceeds market value — the intended answer is HO-8 .
How HO-3 and HO-5 Actually Differ on a Claim
Because the dwelling is open-peril on both HO-3 and HO-5, the only real difference is contents (Coverage C) . Picture a homeowner whose expensive camera is found cracked with no known cause. Under HO-3 the insured must show the damage came from a listed peril such as theft, vandalism, or a falling object; a mysterious crack with no listed cause is denied. Under HO-5 , the insurer must instead prove an exclusion applies, so the same mysterious crack is generally paid. That single shift in burden of proof is why HO-5 commands a higher premium and is marketed to owners of high-value possessions.
Mobile Homes and the Condo/Renter Edge Cases
Manufactured (mobile) homes are not eligible for a standard HO-3; they use a mobile-home endorsement (historically the HO-7 designation) that adapts the homeowners form to a transportable dwelling. For condos, remember the two-policy structure: the association's master policy can be written 'bare walls,' 'single entity,' or 'all-in,' which directly changes how much Coverage A (walls-in) the HO-6 owner needs. A producer who reads the master policy declarations can right-size the HO-6 building limit and the loss-assessment coverage — a common applied-knowledge question on the exam.