by maryd » Thu Apr 15, 2010 07:11 pm
Most of our carriers we represent are offering the new ISO form, H03, but we will still have clients that have the old Texas and I'm looking for the biggest differences in these forms.
Posted: Fri Apr 16, 2010 03:55 am Post Subject:
Texas HO2 = Broad Form (named peril coverage on both real and personal property)
Texas HO3 = Special Form (open perils coverage on real property, named perils on personal property [broad form])
Texas HO5 = Comprehensive (all coverage on an "open" basis)
Texas HO8 = Modified Form (replacement cost far exceeds market value, unusual construction, older homes -- coverage provided on Actual Cash Value (ACV) basis, restricted coverage for theft from premises and losses to personal property off premises)
These policies generally follow the ISO forms, so I don't know what additional information you need. HO3 policies generally require a minimum of 80% insurance to value to avoid a coinsurance penalty in the event of a loss.
Posted: Fri Apr 16, 2010 07:37 am Post Subject:
Hi Max, would you kindly explain the HO8 coverage in details? I didn't quite get what you meant by "unusual construction" and "personal property off premises".
Posted: Fri Apr 16, 2010 03:42 pm Post Subject:
HO8 simply is a special circumstances policy. It is used primarily for very old homes that would definitely be more expensive to rebuild than they are worth. It is also a policy for property that would be difficult to value, as historical homes, and probably impossible to replace with modern construction at any cost. Imagine also a castle built out of masonry materials that could not be easily replaced, let alone finding someone with the skills to rebuild it.
The contract assumes a stated Actual Cash Value as the limit of liability. Very similar to the kind of policy someone with an antique auto or coin/stamp collection would have.
By comparison, HO3s will have contract language that essentially obligates the insurer to replace the property on a like-for-like basis, up to the policy limits or subject to a coinsurance penalty for being underinsured.
As to property off premises, that would also apply to those coin/stamp collections or antiques that are off-site at an exhibition or being transported for repairs/appraisal. Those losses are typically covered by an HO policy. But here, the special value must be negotiated rather than conform to standard policy language.
Posted: Wed Apr 21, 2010 04:13 pm Post Subject: Do a comparison
Because carriers in Texas are allowed to customize their own forms, you may be better off checking out OPIC’s website http://opic.state.tx.us and doing an actual comparison – company to company.
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