1. Forms
2. HO
3. HO-00-05

Form HO 00 05: Homeowners 5 - Comprehensive Form

The Homeowners 5 - Comprehensive Form (HO 00 05) is designed to provide the broadest standard homeowners insurance coverage available for owner-occupants. Its primary function is to offer "open perils" (often referred to as "all-risk") coverage for the dwelling, other structures on the property (like a detached garage or fence), and personal property. This means that instead of listing the specific perils that are covered, the policy covers all direct physical losses except for those specifically excluded in the policy language. The HO 00 05 also includes personal liability coverage (Coverage E) and medical payments to others (Coverage F).

Classes of Business It Applies To

The HO 00 05 is specifically designed for owner-occupants of one- to four-family dwellings. It is generally sought by homeowners who desire the most comprehensive protection for their home and personal belongings and are willing to pay a higher premium for this extensive coverage. This form is particularly suitable for:

• Owners of newer or well-maintained homes: Insurers are often more willing to offer this broad coverage to properties with lower risk profiles.
• Homeowners with significant personal property value: The open perils coverage for personal property is a key differentiator from other common homeowners forms like the HO 00 03, which typically covers personal property on a named perils basis. For example, if a power surge (not caused by lightning) damages expensive electronics, an HO 00 05 would likely cover this, assuming no specific exclusion applies, whereas an HO 00 03 might not unless "artificially generated electrical current" is a listed named peril.
• Individuals seeking peace of mind: Knowing that coverage applies to any loss not explicitly excluded can be a significant benefit for risk-averse homeowners.

It is important to note that eligibility can depend on factors like the property's condition, location, and the homeowner's claims history.

Special Considerations

While the HO 00 05 offers broad coverage, there are important considerations:

• Exclusions: "Open perils" does not mean every conceivable loss is covered. The policy will have a list of exclusions. Common exclusions include, but are not limited to: earth movement, flood, power failure, neglect, war, nuclear hazard, intentional loss, and ordinance or law (though some limited coverage for ordinance or law may be included or available by endorsement). For example, damage from a flood would require a separate flood insurance policy.
• Limitations on Certain Personal Property: The policy typically includes special limits of liability for certain categories of personal property, such as money, securities, jewelry, firearms, and silverware. If the value of these items exceeds the standard limits, homeowners may need to schedule them separately via an endorsement for an additional premium to ensure adequate coverage.
• Replacement Cost vs. Actual Cash Value: HO 00 05 policies often provide replacement cost value (RCV) for personal property, which means the policy will pay the cost to replace damaged items with new items, without a deduction for depreciation. This is a significant advantage over policies that only offer actual cash value (ACV), which deducts for depreciation. However, it's crucial to verify this in the specific policy, as terms can vary.
• Not for all homes: Due to the breadth of coverage, not all homes will qualify for an HO 00 05. Insurers may have stricter underwriting criteria.
• Related Forms: The HO DS 05 is a Declarations page that would accompany the HO 00 05 policy form, outlining the specific coverages, limits, and insured information for that particular policy.

Key Information for Agents and Underwriters

Agents and underwriters should be mindful of the following when dealing with the HO 00 05:

• Pricing: The HO 00 05 is generally more expensive than other homeowners forms, such as the HO 00 03, due to its broader coverage, particularly for personal property.
• Risk Assessment: Underwriting for an HO 00 05 typically requires a more thorough assessment of the property's condition, maintenance, and potential hazards. Eligibility often favors newer, well-maintained homes in lower-risk areas. Factors like the age of the home, roof condition, electrical and plumbing systems, and claims history are critical.
• Coverage Gaps: Despite its comprehensive nature, agents should clearly explain the exclusions to clients. It's crucial to identify potential coverage gaps, such as the need for flood insurance, earthquake endorsements (if applicable in the region), or scheduled personal property endorsements for high-value items. For instance, while the HO 00 05 provides open perils for personal property, if an insured has a valuable art collection, the standard policy limits for such items might be insufficient, necessitating a separate floater or endorsement.
• Comparison with HO 00 03: The primary difference between the HO 00 05 and the HO 00 03 is the coverage for personal property. Both forms typically provide open perils coverage for the dwelling and other structures. However, the HO 00 03 usually covers personal property on a "named perils" basis, meaning only those perils specifically listed are covered. The HO 00 05 extends open perils coverage to personal property. For example, if paint is accidentally spilled on a valuable rug, the HO 00 05 is more likely to provide coverage than an unendorsed HO 00 03, as "accidental spillage" is unlikely to be a named peril.
• Underwriting Guidelines: Insurers will have specific underwriting guidelines for the HO 00 05, often requiring higher dwelling coverage limits and potentially a better insurance score or claims history from the applicant. Some insurers may limit the availability of the HO 00 05 to homes of a certain age or construction type.