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HO8 Homeowners Older Homes Insurance Protection

By Mike Heuer

An HO8 homeowners insurance plan generally is intended for homes that are older and whose actual cash value is much lower than their replacement cost if they are damaged or destroyed by a covered peril. For the most part, homes that are at least 40 years old do not qualify for HO3 or HO1 homeowners insurance policies. Instead, the HO8 plan was created to provide coverage for them

The HO8 policy is very similar to the HO1 homeowners insurance plan in that it protects against 11 named perils and insures homes for their market value, which takes into account depreciation. Homes that are not eligible for HO3 policies often will qualify for HO8 insurance coverage since HO1 plans are not sold in most states.

The 11 named perils for which an HO8 policy provides protection includes damage or destruction from fire and lightning. Fire is the most common peril that strikes such homes. Also named are damages of destruction caused by windstorms or hail, explosion and riot or civil commotion. Other perils include damage caused by aircraft and vehicles, unless the policyholder or other resident is the one to cause the damage with his or her vehicle.

Losses caused by smoke damage also are covered, and smoke damage often is the greatest source of loss when a fire strikes a home. Vandalism and malicious mischief also are covered for losses, as is theft, but often with a limit of $1,000. Volcanic eruption is the final peril named in an HO8 policy, but that usually does not include losses caused by landslides, which often times accompany volcanic eruptions.

Among common and potentially very costly perils against which losses are not covered are losses caused by any sort of water damage. While nearly all homeowners policies do not provide coverage for external flooding, all but the HO8 insurance policy do provide coverage for damages and losses caused by internal flooding and other water damage caused by broken water pipes, water heaters and other internal sources. But the HO8 policy does not. Such protection only can be purchased with an endorsement for internal flooding and water damage. External flooding only can be protected with a separate flood insurance policy.

The HO8 policy also does protect against losses caused by falling objects, such as a tree limb crashing into a home and damaging part of it. Unless the falling object was caused by one of the other names perils, such as a part falling off an aircraft, the loss would not be covered by an HO8 homeowner policy.

Although the HO8 insurance plan is limited in its initial coverage, endorsements can give older homes a great deal more protection. Endorsements also can be purchased to provide comprehensive protection for contents and personal belongings. Many older homes might have an actual cash value much lower than the cost to replace them, but many also might contain highly valuable antiques and other furnishings that require a great deal more protection than an HO8 policy would provide. The proper endorsement can make homeowners much more secure.