HO forms compared: HO-2 through HO-8

Six standard ISO homeowners forms, and the exam tests exactly one thing about each: whether the dwelling and the contents are written on open perils or named perils. Get that grid straight and most of these questions answer themselves. The single most tested item is the HO-3's asymmetry, because the same accident can be covered on the house and uncovered on the furniture.

Questions and answers, explained

All 12 questions above, with the correct answer and why it is correct. Everything here is on ho forms compared: ho-2 through ho-8.

1. A pipe break in a Miami condominium ruins the carpet, the built-in kitchen cabinets and the dishwasher inside unit 7B, and also soaks the drywall of a common-element corridor. Under s. 718.111(11), F.S., which policy is responsible for the items inside the unit?

   • AThe unit owner's policy, because the association's required coverage excludes themCorrect
   • BThe association's policy, which must cover all property located in the building
   • CThe association's policy, but only up to 25 percent of the unit's assessed value
   • DNeither policy, because Florida law excludes interior water damage from both of them

   Why: Section 718.111(11)(f), F.S., requires the association to insure all portions of the condominium property as originally installed, but expressly excludes from that obligation all personal property within the unit or limited common elements and, specifically, floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments. Carpet, built-in cabinets and a dishwasher all sit on that exclusion list, so the unit owner's HO-6 responds to them while the association's policy handles the corridor drywall. Option B is the intuitive answer for candidates who reason that the association owns the building, but Florida draws the line by the type of item rather than by who holds title to the structure.

   Reference s. 718.111(11)(f), F.S.

2. A Sarasota homeowner has an unendorsed ISO HO-3. On the same afternoon, a delivery truck backs into the wooden deck attached to her house, and a leaking aquarium in her home office ruins her desk chair. No policy exclusion applies to either event. How does the HO-3 respond?

   • ABoth losses are covered, because the HO-3 insures the dwelling and personal property on an open-perils basis.
   • BNeither loss is covered, because the HO-3 insures the dwelling and its contents only against the perils specifically named in the form.
   • CThe deck is covered under Coverage A on an open-perils basis, but the chair is not, because Coverage C is named perils.Correct
   • DThe chair is covered under Coverage C on an open-perils basis, but the deck is excluded because attached structures are insured under Coverage B.

   Why: The defining feature of the HO-3 is its asymmetry: Coverages A (dwelling) and B (other structures) are written on an open-perils (special) basis, so any direct physical loss is covered unless excluded, while Coverage C (personal property) is written on a named-perils basis. Accidental impact by a vehicle is not itself an exclusion, so the deck is covered. Water escaping from a fish tank is not among the perils named for Coverage C, so the chair is not. Option D reverses the two and also misstates Coverage B: a deck attached to the dwelling is part of Coverage A, while Coverage B applies to structures separated from the dwelling by clear space. Only the HO-5 extends open perils to Coverage C.

   Reference ISO HO 00 03 (Homeowners 3 — Special Form)

3. Water escaping from a burst common-element pipe ruins a unit's laminate floor covering, its built-in kitchen cabinets, and its refrigerator. Under s. 718.111(11)(f), F.S., whose property insurance is responsible for those three items?

   • AThe association's, because all three are part of the condominium property
   • BThe unit owner's, because all three are excluded from association coverageCorrect
   • CThe association's for the floor, and the unit owner's for the other two items
   • DThe unit owner's for the refrigerator, and the association's for the other two

   Why: Section 718.111(11)(f), F.S., requires the association's property insurance to provide primary coverage for all portions of the condominium property as originally installed, or replacement of like kind and quality in accordance with the original plans and specifications, together with all alterations or additions made to the condominium property or association property. Subparagraph (11)(f)3. then carves out an enumerated list that the association's policy must exclude and that is therefore the unit owner's responsibility: all personal property within the unit or limited common elements, and floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, where these are located within the boundaries of the unit and serve only that unit. Laminate flooring is a floor covering, the cabinets are built-in cabinets, and the refrigerator is an appliance, so all three fall to the unit owner's HO-6 policy. Options A and D are tempting because the water came from a common element, but the source of the loss does not shift the insuring responsibility — the statute divides coverage by the type of property, not by which component failed.

   Reference s. 718.111(11)(f) and (11)(f)3., F.S.

4. A client in Coral Gables tells her agent she wants the broadest standard ISO homeowners protection available: she wants her furnishings, electronics and clothing insured against the same breadth of causes of loss as the house itself, without having to schedule individual items. Which form best meets that request?

   • AAn HO-3 with a scheduled personal property endorsement
   • BAn HO-5 comprehensive formCorrect
   • CAn HO-2 broad form
   • DAn HO-8 modified coverage form

   Why: The HO-5 comprehensive form is the only standard ISO homeowners form that writes Coverage A, Coverage B and Coverage C all on an open-perils basis, so unscheduled personal property is covered for any direct physical loss unless excluded. An HO-3 with a scheduled personal property endorsement broadens only the items actually listed on the schedule, leaving the rest of Coverage C on named perils, so it does not meet her stated request. The HO-2 is named perils throughout, and the HO-8 is a modified form that is narrower still. Note that the HO-5 does not remove the special dollar sublimits on categories such as jewelry, furs, silverware and firearms, nor the policy exclusions — a client with high-value items may still need a floater.

   Reference ISO HO 00 05 (Homeowners 5 — Comprehensive Form)

5. A tenant renting an apartment in Miami asks about an HO-4. The landlord carries insurance on the building itself. Which statement about the HO-4 is correct?

   • AIt provides a Coverage A limit equal to the tenant's proportionate share of the replacement cost of the building the landlord insures.
   • BIt insures the tenant's personal property but provides no personal liability coverage at all, which the tenant must buy under a separate policy.
   • CIt insures the tenant's personal property on an open-perils basis, just as the HO-5 does.
   • DIt insures the tenant's personal property on a named-perils basis and includes personal liability and medical payments.Correct

   Why: The HO-4 tenant form has no Coverage A for the dwelling — the tenant has no insurable interest in the building — so the policy is built around Coverage C (personal property) written on the broad named-perils basis, together with Coverage D loss of use, Coverage E personal liability and Coverage F medical payments. Because tenants often install shelving, flooring or fixtures at their own expense, the form adds a Building Additions and Alterations additional coverage; the limit is a percentage of the Coverage C limit (commonly 10 percent), and that percentage is a form and edition detail rather than a Florida statutory requirement, so always read the declarations.

   Reference ISO HO 00 04 (Homeowners 4 — Contents Broad Form)

6. A covered peril damages the interior of a Fort Lauderdale condominium unit. Destroyed are the built-in kitchen cabinets, the countertops and the tile floor covering, all located within the unit boundaries and serving only that unit. Under Florida law, whose insurance is responsible for those items?

   • AThe unit owner's, because Florida law requires the association policy to exclude built-in cabinets and countertops inside the unit.Correct
   • BThe association's, because built-in cabinets and countertops are permanently attached and therefore part of the common elements.
   • CThe association's policy pays first, and the unit owner's HO-6 is limited to reimbursing the association's deductible for the interior damage.
   • DNeither; property permanently attached to the unit can be insured only if it is scheduled on a personal articles floater.

   Why: Section 718.111(11), F.S. draws the line for Florida condominiums. The association's property insurance policy must exclude all personal property within the unit or limited common elements, and floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments including curtains, drapes, blinds and hardware, or replacements of any of the foregoing, that are located within the boundaries of the unit and serve only that unit. The statute states that such property and any insurance on it is the responsibility of the unit owner. That is precisely the gap the HO-6 unit owners form is designed to fill through its Coverage A for building property. Separately, s. 627.714, F.S. requires a Florida unit owner's residential property policy to include at least $2,000 in property loss assessment coverage, with a deductible not exceeding $250 per direct property loss.

   Reference s. 718.111(11), F.S.; s. 627.714, F.S.; ISO HO 00 06

7. An agent is quoting a 1925 wood-frame house in a historic district of St. Augustine. The home's market value is far below what it would cost to reproduce its ornamental millwork and plaster with like kind and quality. The owner cannot obtain an HO-3. Which ISO homeowners form is designed for this exposure?

   • AHO-3, because it settles dwelling losses on a full replacement cost basis
   • BHO-5, because open perils on all coverages solves valuation problems
   • CHO-6, because dwellings in historic districts are rated as unit-owner risks
   • DHO-8, the modified coverage form for such dwellingsCorrect

   Why: The HO-8 modified coverage form exists for dwellings whose replacement cost substantially exceeds their market value — typically older homes with obsolete or costly-to-duplicate construction. Instead of full replacement cost, dwelling losses are settled on a functional replacement cost basis, meaning the insurer may repair or replace with common, modern materials and methods that serve the same function rather than duplicating the original ornamental work. The HO-8 is a named-perils form on both the dwelling and personal property, and its coverage is narrower than the HO-2; theft coverage in particular is restricted. Answers A and B fail because the problem is the valuation basis, not the breadth of perils, and because most carriers will not write an HO-3 or HO-5 where insurance to value cannot be met.

   Reference ISO HO 00 08 (Homeowners 8 — Modified Coverage Form)

8. A homeowner insured under an unendorsed ISO HO-2 broad form reports four separate incidents. Which one would NOT be covered?

   • ACarpet ruined when a full bucket of paint is accidentally dropped down the stairwellCorrect
   • BShingles torn from the roof of the dwelling by a windstorm during a summer squall
   • CA bedroom ceiling and dresser damaged when a thunderstorm drops a large oak limb through the roof
   • DFlooring buckled by the accidental discharge of water from a burst supply line in a wall

   Why: The HO-2 insures both the dwelling and personal property against a specified list of broad named perils. Windstorm, falling objects, and accidental discharge or overflow of water or steam from a plumbing system are all on that list, so B, C and D are covered. An accidental paint spill is simply not one of the named perils, so the HO-2 does not respond. This is exactly the gap that drives most buyers to the HO-3: under the HO-3's open-perils Coverage A, the same paint damage to the stairwell would be covered because no exclusion applies to it. The candidate takeaway is that on a named-perils form, if the cause of loss is not on the list, there is no coverage regardless of how accidental the event was.

   Reference ISO HO 00 02 (Homeowners 2 — Broad Form)

9. A hurricane damages the roof and common elements of a Hollywood condominium building. The association's policy pays part of the loss, and the association then levies a $9,000 assessment against each unit owner to fund its deductible and the uninsured balance. One owner holds an ordinary Florida residential condominium unit owner's policy. What does Florida law require that policy to contain?

   • ALoss assessment coverage of at least $2,000, written as primary coverage that pays before any other policy covering the same property.
   • BLoss assessment coverage equal to 25 percent of the unit's Coverage A limit, subject to the policy's hurricane deductible for the loss.
   • CNo loss assessment coverage at all, because Florida treats it as a purely optional endorsement the unit owner has to request and pay for.
   • DLoss assessment coverage of at least $2,000 for all assessments arising from the same direct loss, subject to a deductible of no more than $250.Correct

   Why: Section 627.714, F.S. requires that a residential condominium unit owner's policy include at least $2,000 in property loss assessment coverage for all assessments made as a result of the same direct loss to the property, subject to a deductible of no more than $250 per direct property loss. If a deductible was or will be applied to other property loss the same unit owner sustained from that same direct loss, no deductible at all applies to the loss assessment coverage. The maximum amount payable is the unit owner's loss assessment limit in effect one day before the date of the occurrence, so buying up the limit after the storm forms does not help. Option A is the near-miss: it gets the $2,000 floor right but reverses the priority, because the statute requires the policy to state that this coverage is excess over the amount recoverable under any other policy covering the same property. Option B invents a percentage the statute does not use. Note the $2,000 is a statutory minimum, not a cap — a unit owner facing large hurricane assessments should buy a far higher limit.

   Reference s. 627.714, F.S.

10. An Ocala investor is comparing two quotes on the same rental house: one on an unendorsed ISO DP-1 basic form and one on an ISO DP-2 broad form. What does the DP-2 give him that the DP-1 does not?

    • AOpen-perils coverage on the dwelling, subject only to the exclusions the form lists, plus liability protection against tenant claims.
    • BTheft of the tenant's belongings and flood damage from the nearby river, both added to the form's list of named perils.
    • CA longer list of named perils, including accidental water discharge, and replacement cost settlement on the dwelling itself.Correct
    • DCoverage for wear and tear on the aging roof plus sinkhole loss, neither of which the basic form ever reaches.

    Why: The ISO dwelling program runs DP-1 basic, DP-2 broad and DP-3 special. The DP-2 is still a named-peril form, but its list is materially longer than the DP-1's fire, extended coverage and vandalism perils: it adds damage by burglars, falling objects, weight of ice, snow or sleet, accidental discharge or overflow of water or steam, freezing of plumbing, sudden and accidental tearing apart of a heating or air conditioning system, and damage from artificially generated electrical current. The DP-2 also settles dwelling losses at replacement cost, while the DP-1 pays actual cash value. Option A is the tempting choice because it describes the DP-3, not the DP-2: open-perils coverage on the dwelling is the special form's signature, and no form in the dwelling program carries liability at all. Theft of property remains uncovered on a DP-2, which insures only damage caused by burglars, and flood and wear and tear are excluded on every form in the program.

    Reference ISO DP 00 02 (Dwelling Property 2 - Broad Form); ISO DP 00 01 (Dwelling Property 1 - Basic Form)

11. A Hialeah condominium unit owner buys an unendorsed ISO HO-6. She asks what Coverage A of that form insures and how much it provides.

    • AAlterations, fixtures and improvements that are part of her unit, subject to a base limit usually set at $5,000.Correct
    • BHer proportional share of the whole condominium building, for a limit equal to the master policy divided by the unit count.
    • CNothing at all, because the association's master policy is what insures every part of the condominium building.
    • DThe entire structure of the building, for a limit the insurer sets at the building's full replacement cost.

    Why: Coverage A of the unit-owners form insures the alterations, appliances, fixtures and improvements that are part of the building contained within the residence premises, along with items of real property that pertain exclusively to the unit, property that is the insured's insurance responsibility under an association agreement, and structures at the location owned solely by the insured. The form itself states no dollar amount; the base Coverage A limit comes from the homeowners rating rules, is customarily $5,000, and may be increased for additional premium. That decision matters in Florida, because s. 718.111(11)(b) requires the association policy to exclude floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops and window treatments, leaving them to the unit owner. Option B is the tempting one because a unit owner genuinely does own an undivided share of the common elements; the HO-6 does not insure that share as a pro-rata slice of the master policy, and the building itself remains the association's insurance problem.

    Reference ISO HO 00 06 05 11 (Homeowners 6 - Unit-Owners Form), Section I Coverage A (scope of covered property); ISO Homeowners Policy Program Manual, unit-owners rule (base Coverage A limit of $5,000, increasable for additional premium); s. 718.111(11)(b), F.S.

12. A Gainesville office building is insured on the ISO Causes of Loss - Broad Form. Which loss would the broad form pay that the basic form would not?

    • AA ceiling ruined when an air conditioning line cracked and discharged water overnight.Correct
    • BA storefront window shattered by vandals who forced their way into the building lobby overnight.
    • CInventory soaked when the building's automatic sprinkler system leaked with no fire anywhere.
    • DA roof torn open by straight-line winds during a violent July thunderstorm at midday.

    Why: The basic form covers fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse and volcanic action. The broad form keeps all of those and adds three perils: falling objects, weight of snow, ice or sleet, and water damage. Read the commercial definition of that last peril closely. It is the accidental discharge or leakage of water or steam as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning or other system or appliance located on the described premises that contains water or steam. Something has to break apart or crack, so a condensate drain that merely clogs and overflows is not the broad form peril, and the form will not pay the cost to repair the defect that caused the loss. The homeowners version of this peril, HO 00 03 peril 12, is wider and needs no rupture, which is where candidates go wrong. The broad form also adds Collapse as an additional coverage. Option C is the tempting distractor because water is involved and the loss sounds like the water damage peril; sprinkler leakage is already a named peril on the basic form, so it does not distinguish the two forms at all.

    Reference ISO CP 10 10 (Causes of Loss - Basic Form); ISO CP 10 20 (Causes of Loss - Broad Form), Water Damage peril; compare ISO HO 00 03 05 11 Peril Insured Against 12

Drill the whole domain

• Florida Statutes, Rules and Regulations Pertinent to Property and Casualty (15%)
• Types of Property Policies (14%)

Other topics

• Florida's hurricane deductible
• Florida's separate roof deductible
• Catastrophic ground cover collapse vs sinkhole coverage
• Florida's Valued Policy Law
• Florida property claim deadlines
• Occurrence vs claims-made liability forms
• Florida comparative negligence after HB 837
• Florida PIP: the 14-day rule and 80/60 split
• Citizens eligibility and the 20 percent rule
• Law and ordinance and replacement cost
• Bad faith and the civil remedy notice

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