An HO-8 homeowners insurance policy is designed for older dwellings in which the replacement costs are much higher than the current market value. These policies are meant for single-family or multi-family homes more than 40 years old. In fact, if your home is over 40 years old or is considered a historic residence, your only option is to get an HO8 policy.
Of course, there’s plenty more to learn about an HO-8 policy. Independent insurance agents in your area can help you find the right coverage for your older home. But first, we'll explore HO-8 homeowners insurance, what it covers, why it's necessary, and more.
What Is an HO8 Policy?
HO8 insurance coverage, also written as HO-8 insurance, is similar to basic HO1 home insurance. Older home insurance policies will cover 10 named risks, also known as perils.
Claims reimbursements are based on the home’s actual cash value. This means that if you file a claim, the insurer will pay you the replacement cost of your home minus depreciation if your claim is approved. With an HO8 policy, the insurer often rebuilds or repairs your home with different materials than the original, but as close to a match as possible.
What Kinds of Homes Are Covered by HO8 Form Insurance?
HO-8 insurance is designed to cover specific types of homes and properties, including:
- Buildings that are more than 40 years old
- Registered landmarks
- Architecturally significant homes
- Homes constructed of hard-to-replace materials
- Homes that don’t meet all of the cosmetic and structural requirements of HO3 policies
An independent insurance agent can also help you determine if your home or property must be covered by an HO-8 policy.
Why Get HO8 vs. HO3 Insurance?
Most of your friends and neighbors probably have an HO3 home insurance policy for their homes. In many instances, you're likely to also need a standard HO-3 policy. However, there are a few reasons you may have to get HO8 insurance instead of an HO3 home policy.
First, many insurers require proof that your house is fully updated. The home insurance company often demands a four-point inspection before it will issue an HO3 policy for a customer. The four-point inspection must determine the following in order for the property to pass:
- The property's electrical systems are up to date (i.e., minimum of 100 amps service, no knob and tube wiring, no fuses, and no aluminium wiring)
- The property has working central air conditioning or AC window units
- The property does not have portable heating
- The property's roof is in good shape
- The property has an up-to-date and functioning plumbing system
Second, some insurance companies use credit scores to determine eligibility for coverage and the premium amount. Someone with a poor credit score, a past DUI, a bankruptcy filing, or a lien or judgment against them in the last 60 months may be unable to get an HO3 home policy.
If the only block to buying an HO3 policy is cosmetic or structural issues of your property, you’d have to update the plumbing, roofing, electrical, and HVAC systems to qualify. If you're unwilling or unable to make these upgrades, talk with your independent insurance agent about getting an HO8 policy.
What Does HO-8 Insurance Cover?
Usually, an HO8 home policy safeguards homeowners from the hazards listed in their policy documents, and nothing else. Below are the most common dangers your home will be insured against:
- Lightning and fire
- Hail and windstorms
- Explosions
- Vandalism and malicious mischief
- Theft
- Aircraft damage
- Vehicle damage
- Smoke
- Volcanic eruption
- Riots and civil commotions
While this list of covered perils is not as extensive as that found in many HO3 policies, HO8 insurance still provides a lot of important protection for homeowners of older properties.
What's Not Covered by HO-8 Insurance?
All insurance policies have some exclusions, and an HO8 policy is no exception. The following perils are not covered under most HO8 older home policies:
- Mold
- Power surges
- Falling objects
- Water damage
However, homeowners have options to cover some of these common exclusions:
- Water damage: Even though HO3 policies cover water damage caused by burst pipes and some other issues, HO8 insurance excludes these perils. However, you may have the option to add water damage protection to the basic policy for an extra monthly premium. To cover water damage caused by natural flooding, though, you'll need a separate flood insurance policy.
- Falling objects: Though HO3 policies include coverage for falling objects and trees, HO8 insurance specifically excludes these perils, too. However, if you can prove the tree fell because of a covered risk, such as a storm, your insurance carrier would likely approve your claim.
- Earthquakes: Most home insurance policies don't include coverage for earthquake damage. You'll need a separate earthquake insurance policy to cover these natural disasters.
Ask your independent insurance agent about the options available to increase the protection included in your HO8 policy.
Additional HO8 Policy Exclusions
An HO-8 insurance policy also comes with certain other exclusions that are important to be aware of. These often include:
- Nuclear hazards
- Bacteria, fungi, and wet or dry rot
- Damage caused by war and military action
- Power failures
- Diminution of value
- Ordinance or law costs
- Civil authority
- Controlled substance byproducts
Your independent insurance agent can help you review your specific HO8 policy's list of excluded perils.
How Much Does HO8 Home Insurance Cost?
HO8 insurance tends to be considerably more expensive than HO3 insurance because of the increased risk of insuring older properties. As such, the current average cost of HO-8 insurance is $2,035 annually for a policy with $300,000 to $399,999 in dwelling coverage.
This is much higher than the current average cost of HO-3 home insurance, which is $1,278 annually for a policy with the same amount of dwelling coverage. However, the cost of your specific policy will vary based on several factors, such as your location. An independent insurance agent can help you find affordable HO8 insurance near you.
An Independent Insurance Agent Can Help You Find HO-8 Insurance
Independent insurance agents are your greatest ally when it comes to finding the right type of home insurance for your unique property. These agents have access to multiple insurance companies, so they're free to shop and compare HO8 policies and quotes for you.
They'll get you matched to the policy with the ideal amount of coverage at the best possible rate. And down the road, your agent can help you file home insurance claims and update your policy as necessary.
Sources
https://www.kin.com/blog/ho8-policy/
https://www.policygenius.com/homeowners-insurance/what-is-an-ho-8-policy/#how-much-does-an-ho-8-insurance-policy-cost
