What are the basic differences between ho3 and ho8? What is the protection available under Ho8 policy?
Total Comments: 12
Posted: Wed Jan 29, 2014 07:23 pm Post Subject:
I would not recommend anyone purchase an HO-8 policy if the HO-3 is available.
Please be careful what you post. Blanket statements such as this. Why? Because the original question simply asked what is the difference between an HO-3 and an HO-8 policy.
There are absolutely circumstances in which the HO-3 policy will be 100% wrong. The whole purpose of an HO-8 policy is to provide adequate protection to the homeowner whose home is of historical value, constructed of materials not easily replaced, or otherwise more valuable than mere "replacement cost."
Let's say you own a mansion built in the 1850s. It is comprised of 5 bedrooms, a kitchen, dining room, and living room, as well as a library and salon. It also has a 3/4 wraparound porch, several masonry fireplaces, and a crystal chandelier in the grand entry. Total square feet = 3,000 on two floors. There have been no renovations other than modernization of electrical and plumbing. In other words, this is a 19th Century showpiece.
What would the cost be to replace a 3,000 sq ft two-story tract home? How does that compare to a home that is 150 years old, built with materials and methods that few people have skills or knowledge in dealing with them. A shoddy repair with modern materials to a damaged wall could cause the property to lose substantial value. To repair the same damage could cost five times as much as modern construction.
Your HO-3 policy will not cover that 5x damage claim. It will only pay the cost of modern materials.
As for a DP-3 providing better coverage than an HO-8, I rather doubt that. Can you provide specific examples? You need to explain why an owner-occupied dwelling would be better covered with a DP- form than an HO form. What will protect the owner-occupant for the loss of personal property if all he has is a DP-1, -2, or-3?
Posted: Thu Jan 30, 2014 06:45 pm Post Subject:
I can not speak for your markets, it appears your specialize in Life and Disability. But we have markets to write a DP-3 owner occupied with up to 40% of Coverage A for Personal Property. Almost the same amount standard on an HO-3. The DP-3 also includes 25% increase for ordinance or Law coverage. Along with that it is written under special form with replacement cost and included s coverage for water damage. I would never recommend someone purchase a policy that is actual cash value when an H0-3 or DP-3 policy can provide replacement cost. If you would like to use the 1850's mansion example that's fine but that is an exception to the rule as I do not quote very many of those. Since you stated only the plumbing and electrical have been updated I would say a 164 year old roof is not insurable in the first place and the mansion is not relevant to the original question.
However, I can inform you that we have carriers that pay CSR's and Agents and additional 50 dollars per application to write the policy under the HO-8 policy form instead of the HO-3 or DP--3. form. This is because it is an actual cash value policy with limited coverage. This is very profitable for the Insurance carrier. If you would like to read the HO-8 mortified form policy conditions you can view them at this link.
Posted: Wed Jan 29, 2014 07:23 pm Post Subject:
I would not recommend anyone purchase an HO-8 policy if the HO-3 is available.
Please be careful what you post. Blanket statements such as this. Why? Because the original question simply asked what is the difference between an HO-3 and an HO-8 policy.
There are absolutely circumstances in which the HO-3 policy will be 100% wrong. The whole purpose of an HO-8 policy is to provide adequate protection to the homeowner whose home is of historical value, constructed of materials not easily replaced, or otherwise more valuable than mere "replacement cost."
Let's say you own a mansion built in the 1850s. It is comprised of 5 bedrooms, a kitchen, dining room, and living room, as well as a library and salon. It also has a 3/4 wraparound porch, several masonry fireplaces, and a crystal chandelier in the grand entry. Total square feet = 3,000 on two floors. There have been no renovations other than modernization of electrical and plumbing. In other words, this is a 19th Century showpiece.
What would the cost be to replace a 3,000 sq ft two-story tract home? How does that compare to a home that is 150 years old, built with materials and methods that few people have skills or knowledge in dealing with them. A shoddy repair with modern materials to a damaged wall could cause the property to lose substantial value. To repair the same damage could cost five times as much as modern construction.
Your HO-3 policy will not cover that 5x damage claim. It will only pay the cost of modern materials.
As for a DP-3 providing better coverage than an HO-8, I rather doubt that. Can you provide specific examples? You need to explain why an owner-occupied dwelling would be better covered with a DP- form than an HO form. What will protect the owner-occupant for the loss of personal property if all he has is a DP-1, -2, or-3?
Posted: Thu Jan 30, 2014 06:45 pm Post Subject:
I can not speak for your markets, it appears your specialize in Life and Disability. But we have markets to write a DP-3 owner occupied with up to 40% of Coverage A for Personal Property. Almost the same amount standard on an HO-3. The DP-3 also includes 25% increase for ordinance or Law coverage. Along with that it is written under special form with replacement cost and included s coverage for water damage. I would never recommend someone purchase a policy that is actual cash value when an H0-3 or DP-3 policy can provide replacement cost. If you would like to use the 1850's mansion example that's fine but that is an exception to the rule as I do not quote very many of those. Since you stated only the plumbing and electrical have been updated I would say a 164 year old roof is not insurable in the first place and the mansion is not relevant to the original question.
However, I can inform you that we have carriers that pay CSR's and Agents and additional 50 dollars per application to write the policy under the HO-8 policy form instead of the HO-3 or DP--3. form. This is because it is an actual cash value policy with limited coverage. This is very profitable for the Insurance carrier. If you would like to read the HO-8 mortified form policy conditions you can view them at this link.
http://www.filedropper.com/ho-8
actual product vs ISO form can vary greatly.
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