Summary: The coverages of the standard homeowners forms (Forms HO 00 02, 03, 04, 05, 06, 08, and 14) are designed to provide the kinds of insurance protection that most homeowners will need. However the needs of individual insureds can diverge, so endorsements are used to tailor coverage to meet these needs. Additionally, insurers may use endorsements to limit coverage, like when the windstorm or hail exclusion endorsement is attached to coastal homeowners policies.
The endorsements discussed here are those under the jurisdiction of Insurance Services Office (ISO). They do not constitute the extent of tailoring possible with respect to homeowners forms. The introduction in the ISO homeowners manual to the program's general rules state that "in all cases not specifically provided for in this manual," the rules, rates, forms, and endorsements of individual insurers govern each coverage. This makes it possible for insurers to develop special endorsements as the need arises, assuming, of course, that the proposed risk is considered insurable and that an appropriate premium can be obtained.
The homeowners program was revised in 2022, with previous versions of 2011 and 2000. Comments relating to individual endorsements below are based on form designations and language of the 2022 ISO homeowners program unless otherwise indicated. The edition date of the 2022 endorsements are generally 03 22; the 2011 endorsements are generally 05 11. Differences from the 2011 program in language or coverage provisions are noted. This discussion is on multistate forms; endorsements limited to one or two states have not been included.
The endorsements are discussed in numerical order. Because there are so many endorsements, we have split the discussion into multiple sections:
Part 5 MH 04 01 to MH 04 47 Mobilehome Coverage
Part 6 HO 05 24 to HO 05 86
Part 7 HO 06 01 to HO 06 49
Part 8 HO 06 51 to HO 06 95
Part 9 HO 07 01 to HO 07 59 Home Business Insurance Coverage
Part 10 HO 24 01 to HO 24 70
Part 11 HO 24 71 to HO 34 03
Numerical list of Endorsements:
HO 04 77 03 22 Ordinance Or Law Increased Amount Of Coverage
HO 04 78 03 22 Multiple Company Insurance
HO 04 81 03 22 Actual Cash Value Loss Settlement
HO 04 85 10 00 Fire Department Clause (Subscription Contract Services)
HO 04 90 03 22 Personal Property Replacement Cost Loss Settlement
HO 04 93 03 22 Actual Cash Value Loss Settlement For Windstorm Or Hail Losses To Roof Surfacing
HO 04 94 03 22 Windstorm Or Hail Exclusion
HO 04 95 03 22 Limited Water Back-Up And Sump Discharge Or Overflow Coverage
HO 04 97 03 22 Limited Home Day Care Coverage
With the special provisions filed beginning in 1994, ordinance or law coverage was added as an additional coverage for all but form HO 00 08. It is also not included in HO 00 14. This coverage responds to loss resulting from the operation of laws regulating the construction, repair, or demolition of a structure following a covered loss.
The homeowners forms automatically provide up to 10% of the Coverage A limit (or the building additions and alterations limit for form 00 04) to pay for increased costs to comply with an ordinance or law. Coverage may be increased in 25 percent increments up to 100 percent, with additional amounts available depending upon the insurer.
The endorsement does not respond to costs to comply with any ordinance or law regulating or enforcing clean up or removal of pollutants.
This endorsement can be used with all forms except HO 00 08 and HO 00 14.
Homeowners section I coverages may be divided between two or more insurers if all agree to such an arrangement. This is usually done only in the case of unusually large risks.
The HO 04 78 endorsement is attached to the policy of each company participating in the shared coverage. It specifies the percentage of the total amount of insurance that the insurer will pay (subject to the limit shown in the declarations), the total limits of liability, and the name of the insurer providing section II coverage (since only one insurer may provide section II protection). The insurer(s) not providing Section II coverage subtracts the applicable amount from their premium determination.
The endorsement may be used only if the same form, deductibles, and endorsements apply to all participating policies. All Section I coverage must be divided. The sole exception is scheduled personal property coverage that may or may not be subject to division as the participating insurers choose. In fulfilling the replacement cost condition under forms HO 00 02, HO 00 03, and HO 00 05, the total amount of insurance from all carriers must be 80 percent or more of the building's full replacement cost immediately before the loss.
This endorsement can be used with all homeowners forms.
This endorsement may be used with forms HO 00 02, HO 00 03, or HO 00 05 if at the policy inception the insured selects less than 80 percent insurance to value. Those policies provide building loss settlement on a replacement cost basis if the amount of insurance is at least 80% of the replacement cost. This endorsement provides that covered property losses will be settled at actual cash value if the property is insured at less than 80 percent of replacement cost, but not more than the amount required to repair or replace the damaged or lost property. The property can be insured for less than 50% for more premium.
This endorsement was once used primarily with the HO 00 08; that form now has its own loss settlement provisions. See Homeowners Form HO 00 08 for more information.
This endorsement is used to provide replacement cost coverage (otherwise available only for buildings) for personal property, awnings, carpeting, household appliances, and outdoor equipment and antennas.
Certain items of property that are separately described and specifically insured in the policy and not subject to agreed value loss settlement also receive replacement cost treatment under the endorsement. Items in this second category are limited to: jewelry; furs and fur-trimmed or fur garments; cameras, projection machines, films, and related equipment; musical equipment and related items; silverware, silver-plated ware, goldware, gold-plated ware, platinum and platinum plated ware, and pewterware (but not pens, pencils, flasks, smoking implements, or jewelry); golf clubs, golf clothing, and golf equipment.
However, if endorsement Scheduled Personal Property Coverage (with agreed value loss settlement) endorsement HO 04 60 is attached to the policy along with HO 04 90, the property subject to agreed value loss settlement will not be subject to repair or replacement cost settlement.
Recovery for all property insured under the endorsement is limited to the smallest of five amounts: (1) replacement cost at the time of loss; (2) the full repair cost; (3) the coverage C limit, if applicable; (4) any applicable special limits; or (5) the limit that applies to any item separately described and specifically insured in the policy. Four categories of property are not eligible for replacement cost coverage: (1) antiques, fine arts, and similar property; (2) memorabilia, souvenirs, collector's items, and the like; (3) property not kept in good or workable condition; and (4) obsolete articles that are stored or not being used. The first two categories represent types of property for which an accurate replacement value cannot be determined. Fine arts and antiques are often scheduled for agreed value coverage under a fine arts floater. If allowed to remain under the homeowners policy's actual cash value provisions, such property is covered for its market value. The last two categories comprise property for which replacement cost recovery would violate the indemnity principle and perhaps invite a moral hazard on the part of the insured.
For losses with a replacement value of more than $1,000, the insurer will pay no more than the actual cash value for the loss until the actual repair or replacement is complete. An actual cash value claim can be made at the time of loss and amended to replacement cost within 180 days.
This endorsement can be used with all forms except HO 00 08 and HO 00 14.
The homeowners forms provide blanket coverage for Coverage B other structures located on the residence premises in the amount of 10 percent of the Coverage A limit. Endorsement HO 04 91 may be used to extend this blanket coverage to structures that the insured owns and uses in connection with the residence premises but which are located elsewhere. Coverage is provided within the policy's coverage B limit.
Before the introduction of this endorsement, insureds were limited to the more expensive method of covering such property under a fire policy. The following types of other structures are excluded from coverage under the endorsement: (1) structures either being used as or capable of being used as dwellings; (2) structures used to conduct a business or to store business property; or (3) structures rented to someone who is not a tenant of the dwelling (so that rental to a roomer, boarder, or a tenant of a multi-family home would not disqualify the structure from coverage under the endorsement). If the Broadened Home-sharing Host Activities Coverage endorsement is added to the policy, then coverage is provided for structures used primarily for home-sharing activities. This is an exception to the exclusion for a structure from which business is conducted. In addition, there would be coverage for a structure rented to a home-sharing occupant. If the endorsement is not added, then the exclusions remain the same..
The endorsement deletes replacement cost coverage for these other structures and substitutes loss settlement on an actual cash value basis. If specific, rather than blanket coverage is more appropriate, insureds can add coverage for other structures under endorsement HO 04 92 specific structures away from the residence premises (see below).
This endorsement can be used with forms HO 00 02, HO 00 03, and HO 00 05.
This endorsement is similar to HO 04 91 Coverage B—other structures away from the residence premises, seen above, in that the other structures must be used in connection with the "residence premises," and not used as a dwelling, or for business (either to conduct or to store business property), or rented. The difference is that, under this form, coverage may be scheduled for each specific structure, which serves the purpose of not diluting the coverage B limit of liability. The schedule provides for a description and location of each structure and a limit. The scheduled limit is the total amount the insured will recover for loss or damage; recovery is on an actual cash value basis. The coverage afforded by the HO 04 91, on the other hand, does not increase the coverage B limit of liability. Land is excluded from coverage, including land on which the named structures are located.
As with a number of other endorsements, the 2017 changes center around the Broadened Home-sharing Host Activities endorsements. If that endorsement is not part of the policy then the exclusions are the same. If the endorsement is part of the policy, then coverage does apply if the other structure is rented or held for rental to a home-sharing occupant.
This endorsement can be used with forms HO 00 02, HO 00 03, and HO 00 05.
This endorsement provides for an actual cash value settlement for "roof surfacing" damaged by windstorm or hail. "Roof surfacing" is defined in the endorsement as shingles or tiles, cladding, metal or synthetic sheeting, and roof flashing. The insured assumes a greater share of a covered loss in exchange for a premium credit. Premium is determined by multiplying the base premium by a factor of 0.99.
This endorsement can be used with forms HO 00 06 and HO 00 08. The provisions for the HO 00 06 specify that actual cash value settlement applies to the portion of roof surfacing that the insured is responsible for under a corporation or association of property owners agreement if the loss is caused by wind/hail, in addition to personal property and grave markers. The provisions for HO 00 08 specifies that roofs of structures that are not buildings, and roof surfacing on buildings if the roof surfacing was damaged by wind or hail are settled on an actual cash value basis.
An additional provision is added that these provisions do not apply to structures insured under the Specific Structures Away From the Residence Premises – Actual Cash Value Loss Settlement HO 04 92 or Specific Structures Away From the Residence Premises – Replacement Cost Loss Settlement for Buildings HO 06 92 endorsements if they are part of the policy.
This endorsement can be used with forms HO 00 06 and HO 00 08. A related endorsement, Limited Loss Settlement For Windstorm or Hail Losses to Roof Surfacing Endorsement HO 06 46, can be used with forms HO 00 02, HO 00 03, and HO 00 05.
Coverage for the perils of windstorm or hail may be excluded by means of endorsement HO 04 94. Insureds who choose to exclude coverage for these perils receive a premium credit. The endorsement does not eliminate coverage for loss by fire or explosion that results from windstorm or hail damage. Loss of use coverage (coverage D) is also still covered, even if resulting from windstorm or hail damage.
This endorsement can be used with all homeowners forms.
This endorsement provides coverage, up to the limit shown in the Schedule, for loss caused by water or water-borne material that originates from within the dwelling that backs up through sewers or drains, or overflows or is discharged from a sump, sump pump, or related equipment. The loss is covered even if the overflow or discharge results from mechanical breakdown or power failure, but there is no coverage if loss is caused by the negligence of an insured. This endorsement removes the Power Failure exclusion.
The basic limit is $5,000, with options of $10,000, $15,000, $20,000, or $25,000.
The endorsement can be used with all forms except HO 00 08. For broader coverage, endorsement HO 06 95 is available, and will be discussed later.
Property and liability coverage for a home day care business is available to a homeowner under endorsement HO 04 97, provided the business is conducted by an insured on the residence premises. If the business is conducted in another structure (on the residence premises), a limit of liability for that structure is scheduled on the endorsement. Otherwise, the dwelling/building is selected. The endorsement provides property and liability coverages. Personal property of the business is covered under the Coverage C limits. The limit of $3,000 does not apply to furnishings, supplies and equipment of the "business" listed in the schedule. As to the section II personal liability and medical payments coverage, bodily injury or property damage arising from the following are excluded: ownership, maintenance, use, loading, unloading, negligent supervision, or entrustment by the insured to others of draft or saddle animals, or vehicles used with them, aircraft, hovercraft, motor vehicles, or watercraft, whether owned, operated, or hired by or for the insured or employee, or used by the insured for instruction in their use. Excluded also is injury to any employee of an insured (other than a residence employee), arising out of the day care operation. All other section II exclusions apply.
The endorsement also imposes a policy year aggregate limit for personal liability and medical payments combined. This is the most the insurer will pay regardless of the number of occurrences, insureds, claims made, or persons injured. The limit corresponds to the coverage E limit shown in the declarations, with a further per person per accident sublimit for day care related medical payments equal to the coverage F limit. The severability of insurance clause specifies that coverage applies separately to insureds except with respect to the aggregate limit, so the aggregate limit remains unaffected by the number of insureds.
This endorsement can be used with all forms except HO 00 08 and HO 00 14.
Many homeowners insurers in recent years have introduced coverage that is similar to the ISO endorsement for loss to refrigerated property. Endorsement HO 04 98 provides $500 coverage (with a $100 deductible) for property in freezers and refrigerators for loss caused by: (1) "loss of power" to the refrigerator or freezer caused by damage to the generating or transmitting equipment (whether on- or off-premises), or (2) the unit's mechanical failure. "Loss of power": is defined in the endorsement as the complete or partial interruption of electric power due to conditions beyond an insured's control. Protection is included within the coverage C limit.
Coverage will only apply if the refrigeration unit was maintained in proper working condition prior to the loss. The endorsement states that the power failure exclusion does not apply to the coverage.
This endorsement can be used with all forms except HO 00 08.
This endorsement provides coverage for direct physical loss to insured property covered under Section I caused by "sinkhole collapse". Sinkhole collapse is defined in the endorsement as the actual physical damage arising out of or caused by the sudden settlement or collapse of the earth supporting such property and only when such settlement or collapse results from subterranean voids created by the action of water on limestone or similar rock formations. In conjunction with this coverage agreement, the endorsement removes sinkhole collapse from the earth movement exclusion.
This endorsement can be used with all forms except HO 00 08 and HO 00 14.