1. Forms
2. HO
3. HO-00-15

What the form is

The HO 00 15, Special Personal Property Coverage endorsement, is designed to be attached to a homeowners insurance policy, most commonly the HO 00 03 Special Form. Its primary function is to broaden the coverage for Personal Property (Coverage C). Standard HO 00 03 policies cover personal property on a 'named perils' basis, meaning only losses caused by perils specifically listed in the policy are covered. The HO 00 15 endorsement changes this to 'open perils' or 'risks of direct physical loss' coverage for personal property. This means that personal property is covered for direct physical loss from any cause, unless that cause is specifically excluded in the policy or the endorsement itself. This significantly enhances the protection for the insured's belongings.

Classes of business it applies to

This endorsement applies to Personal Lines Homeowners Insurance. It is used for individuals or families who own and occupy a dwelling and are insured under a homeowners policy, typically an HO 00 03. It is not intended for commercial risks.

Real-world example: A homeowner has an HO 00 03 policy. Their personal property (furniture, electronics, clothing, etc.) is covered for perils like fire, theft, and windstorm. If they add the HO 00 15 endorsement, their personal property would also be covered for accidental damage not caused by a listed peril, such as accidentally spilling paint on a valuable rug or a child unintentionally breaking an expensive electronic device, provided these events are not specifically excluded.

Special considerations

• Equivalency to HO 00 05: Adding the HO 00 15 to an HO 00 03 policy essentially provides personal property coverage similar to that of an HO 00 05 Comprehensive Form, which includes open perils coverage for both the dwelling and personal property.
• Exclusions still apply: While 'open perils' coverage is broad, it is not 'all-loss' coverage. The policy and the HO 00 15 endorsement will still contain exclusions for certain types of losses, such as wear and tear, intentional damage by the insured, flood, earthquake (unless added by another endorsement), and others.
• Historical Context and Availability: The HO 00 05 form was introduced by ISO, in part, to provide a base policy with open perils for personal property, potentially reducing the need for the HO 00 15 endorsement with an HO 00 03. Some sources indicate the HO 00 15 04 91 was eliminated when the HO 00 05 became available. However, the concept and the endorsement (or carrier-specific equivalents) may still be utilized in the market.
• Valuation: This endorsement addresses the perils covered, not necessarily how losses are valued (e.g., Actual Cash Value vs. Replacement Cost). Replacement cost coverage for personal property is typically added via a separate endorsement, such as the HO 04 90.

Key information for agents and underwriters

• Risk Assessment: Upgrading personal property coverage to 'open perils' increases the insurer's potential exposure. Underwriters should evaluate the insured's lifestyle, the nature and value of their personal property, and their claims history when considering this endorsement.
• Pricing: Due to the broader coverage afforded, attaching the HO 00 15 will typically result in an additional premium.
• Client Education: Agents should clearly explain the benefits of 'open perils' versus 'named perils' coverage to clients. It's also crucial to manage expectations by explaining that 'open perils' does not mean every conceivable loss is covered and that exclusions still apply.
• Alternative Forms: For clients desiring open perils coverage for both dwelling and personal property from the outset, the HO 00 05 form might be a more straightforward option if available and suitable.
• Underwriting Guidelines: Insurers may have specific underwriting guidelines regarding when the HO 00 15 can be added, such as minimum dwelling coverage amounts or specific risk characteristics.