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 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:
The homeowners forms exclude coverage for cannabis. This endorsement, introduced in 2022, offers coverage for direct physical loss to cannabis caused by certain perils. The basic limit is $1,000 and can be increased up to $5,000. This coverage is additional insurance.
Coverage is provided for loss caused by fire or lightning, explosion, riot or civil commotion, aircraft, vehicles not owned or operated by a resident of the residence premises, vandalism or malicious mischief, or theft. Coverage does not apply to prescription drugs obtained by following the lawful orders of a licensed health care professional, and to goods or services containing or derived from hemp.
HO 24 01, discussed later, can be used for broadened liability coverage related to cannabis.
This endorsement can be used with all forms except HO 00 08 and HO 00 14.
The homeowners policies exclude coverage for theft to a dwelling under construction, or of materials and supplies used in construction, until the dwelling is finished and occupied. This endorsement can be used to provide such coverage for Coverage C property; Coverage A and B coverage can be provided by HO 06 67 and will be discussed later.
To be eligible, the dwelling must be fully enclosed with windows and doors and have operational locks. Coverage is available in increments of $5,000, up to $25,000. The limit is listed in the Schedule, along with a coverage inception and termination date.
This endorsement can be used with all forms except HO 00 08 and HO 00 14.
The homeowners policies limit coverage for personal property located in a self-storage facility to either 10% of the Coverage C limit or $1,500, whichever is greater. The limit can be increased by scheduling it in this endorsement; the $1,500 option would no longer apply. The factor used in determining the premium is based on which policy the endorsement is attached to.
As with the homeowners policies, the sublimit for property located in a self-storage facility does not apply to personal property moved from the residence premises because it is being remodeled or repaired, or not fit to live in or store property in.
This endorsement can be used with all forms except HO 00 08 and HO 00 14.
This endorsement amends the definition of an "insured" to include a trustee or a trust named in the Schedule. The trust must be recognized under applicable state law as a legal entity with the capacity to sue or be sued in a court having jurisdiction.
The trustee is insured only for any insurable interest in the dwelling or other structure (Coverage A and B) held in trust. They are insured for liability (Coverage E and F) for bodily injury or property damage arising out of the ownership, maintenance, or use of an insured location held in trust, with respect to their duties as a trustee.
The definition of "business" is amended by this endorsement to include activities performed as a trustee in connection with administering the named trust. If the policy is canceled or nonrenewed, the insurer will mail notice to the trustee(s) named in the Schedule.
The insurer should be provided with copies of the trust documents as often as they reasonably require. The insurer should also be promptly notified of any material change related to the trust that occurs during the policy period.
This endorsement can be used with all forms except HO 00 04 and HO 00 14.
This endorsement is new with the 2022 program and gives the ability to specifically exclude a structure named in the Schedule for Section I and Section II coverage. However, it does give the option to provide liability coverage for that structure if the box in the Schedule is checked, removing the Section II exclusion.
This endorsement was introduced to give insurers more underwriting flexibility. Insurers have had instances where they were willing to underwrite a risk, but for one structure, such as a broken down old shed or garage. With this endorsement they can specifically exclude that structure and underwrite a risk they otherwise would not have accepted.
This endorsement can be used with all forms except HO 00 14.
This endorsement provides coverage for the increased cost of green upgrades to the residence premises, other building structures, personal property, and, if elected for, expenses related to green upgrades.
"Green" is defined in the endorsement to mean the enhanced energy efficiency or use of: environmentally preferable materials; sustainable materials; or products or methods in design, construction, manufacture, or operation, as recognized by a green standards-setter. "Green standards-setter" is also defined, meaning an accredited organization or governmental agency that produces, maintains, and certifies or rates "green" products and practices.
This endorsement replaces replacement cost loss settlement with loss settlement that uses more energy-efficient, environmentally preferable materials and methods. Coverage is provided for green upgrades to covered property under Coverage A, B, and C. Upgrade to a vegetated roof is not covered unless indicated in the Schedule. The maximum amount available for the increased cost of loss is also shown in the Schedule.
Eligibility for green upgrades property coverage is limited to property to which replacement cost loss settlement applies; for personal property coverage, HO 04 90 Personal Property Replacement Cost Loss Settlement Endorsement must be attached to the policy.
There is no coverage for loss incurred by the insured due to contamination by pollutants, or for any additional cost above the cost of a green upgrade for satisfying the requirements of an ordinance or law.
This endorsement can be used with all forms except HO 00 04, HO 00 08, and HO 00 14.
This endorsement provides coverage for direct physical loss to covered household appliances located on the residence premises caused by mechanical breakdown.
"Mechanical breakdown" is defined to mean direct loss to a household appliance caused by, resulting from, or consisting of: failure of pressure or vacuum equipment; mechanical failure; electrical failure, including arching; or rupture, bursting, bulging, implosion or steam explosion.
"Household appliance" is defined as well as includes things like the central air conditioning system, elevators, heating systems, security systems, saunas, hot tubs, swimming pool pumps, stoves, refrigerators, and well water pumps and sump pumps. Specifically excluded are any part of a plumbing system, fire protection system, or any roof drain, gutter, downspout, or similar fixture.
The aggregate limit is shown in the Schedule and starts at $5,000 and can be increased to $10,000, $15,000, $20,000, $25,000, or $50,000.
This endorsement can be used with all forms except HO 00 04, HO 00 08, and HO 00 14.
HO 06 43 03 22 Cosmetic Damage Exclusion - Windstorm Or Hail
Windstorms and hail can cause damage to roof surfacing, siding, doors, and windows that is strictly cosmetic: it does not affect the functioning of the material, just changes its appearance for the worse. Carriers have at times balked at paying for cosmetic damage since no real harm has been done other than appearance. This exclusion has been developed so that an insured who is not as concerned about appearances, especially to something like the roof that is not always noticed, can receive a reduction in premium in exchange for cosmetic losses being excluded.
Cosmetic damage that alters the appearance of the exterior surfacing on buildings covered under Coverage A or B caused by windstorm or hail is excluded. The damage must be purely cosmetic; if the surfacing loses function as a barrier to the elements, then the exclusion does not apply.
This endorsement can be used with all forms except HO 00 04, HO 00 06, and HO 00 14.
This endorsement is very similar to HO 06 43, seen above, but this endorsement only applies to roof surfacing, as opposed to all exterior surfacing.
"Roof surfacing" is defined as the shingles or tiles, cladding, metal or synthetic sheeting, and roof flashing. This includes all materials used in securing the roof surface and all materials applied to or under the roof surface.
The exterior surfacing coverage provided by HO 06 43, seen above, includes roof surfacing, as well as siding, doors, and windows.
This endorsement can be used with all forms except HO 00 04, HO 00 06, and HO 00 14.
This endorsement provides loss settlement based on the type of roof surfacing material and the age of the roof. A table is provided and based on the roof age and material, shows the percentage of the replacement cost the insurer will pay. For all roof types up to 4 years old, the insurer will pay 100% of the replacement cost. Beyond that, the percentage goes below 100% and gets gradually lower based on age. Stronger materials like metal or slate have a higher loss percentage when comparing across the same age of the roof versus weaker materials like composition or asphalt shingle.
This coverage only applies to damage caused by windstorm or hail, and to buildings covered under Coverage A or B.
This endorsement can be used with forms HO 00 02, HO 00 03, and HO 00 05.
This endorsement changes the definition of residence premises to include "on the inception date of the policy period shown in the Declarations". This allows the policy to provide coverage if the insured is not living at the premises after the policy is in force. This endorsement can be used with all homeowners forms.
This endorsement provides coverage for when the insured is temporarily not residing in the residence premises shown in the Declarations. The time period for which the insured is away should be scheduled in the endorsement.
There is an additional premium charge, which is calculated by multiplying the base premium by a factor of 1.02 for the first 30 days. Each additional 30 days increases the factor by 0.02.
This endorsement can be used with all homeowners forms.