What the form is
The HO 04 65, titled "Coverage C Increased Special Limits Of Liability," is an endorsement to a homeowners insurance policy. Its primary purpose is to allow insureds to increase the specific sublimits that the standard homeowners policy places on certain categories of valuable personal property covered under Coverage C (Personal Property). Homeowners policies typically have maximum payout amounts for items like money, bank notes, bullion, gold, silver, platinum, coins, medals, scrip, stored value cards, smart cards, securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, personal records, passports, tickets, stamps, watercraft (and their trailers, furnishings, equipment, and outboard engines or motors), trailers not used with watercraft, loss by theft of jewelry, watches, furs, precious and semi-precious stones, loss by theft of firearms and related equipment, and loss by theft of silverware, silver-plated ware, gold-ware, gold-plated ware, platinum-ware, platinum-plated ware and pewterware. This endorsement enables the policyholder to select higher limits for these specified categories, as shown in the schedule of the endorsement.
Classes of business it applies to
This endorsement applies to personal lines homeowners insurance. It is designed for individuals who own personal property items whose value exceeds the standard special limits provided in their homeowners policy. Examples include:
- Policyholders with collections of jewelry, watches, or furs that are more valuable than the typical theft sublimit.
- Individuals who keep more cash or bullion at home than the standard $200 limit (which can be increased, for example, up to $2,500 with this endorsement).
- Owners of valuable firearms collections where the theft sublimit is insufficient.
- Insureds with expensive silverware or goldware.
- Those holding valuable securities or important documents at home.
Special considerations
- This endorsement increases the sublimits for specified categories of property; it does not broaden the perils covered for that property under the base policy, nor does it increase the overall Coverage C limit. The increased limits are still subject to the policy deductible and covered perils.
- It is important to differentiate this endorsement from scheduling personal property (e.g., using forms like HO 04 60 Scheduled Personal Property Endorsement or HO 04 61 Scheduled Personal Property Endorsement). Scheduling typically provides broader, often "all-risk" or "open perils" coverage for individually listed items and may have an agreed value loss settlement, often without a deductible. HO 04 65 simply raises the existing category sublimits within Coverage C.
- The availability and the maximum amounts by which these limits can be increased may vary by insurance company and the specific homeowners form being endorsed.
- For certain homeowners forms, like the HO 00 05 (Comprehensive Form), a different endorsement, HO 04 66, is used to achieve a similar outcome because the HO 00 05 has different base special limits. Similarly, HO 00 04 (Contents Broad Form) might use HO 05 24, and HO 00 06 (Unit-Owners Form) might use HO 17 31 for increasing certain limits.
- The Insurance Services Office (ISO) updated many homeowners forms and endorsements in its 2022 program, and this endorsement was part of those revisions.
- This endorsement generally cannot be used with forms HO 00 08 (Modified Coverage Form) and HO 00 14 (Contents Comprehensive Form).
Key information for agents and underwriters
- Agents: It is crucial for agents to discuss personal property inventories with clients to identify if the standard special limits in their homeowners policy are adequate. If a client possesses valuable items in categories like jewelry, firearms, or silverware that exceed these standard limits, the HO 04 65 endorsement should be recommended. Agents must clearly explain the difference between increasing special limits with this endorsement versus scheduling property. The schedule on the endorsement must be completed accurately, reflecting the new, increased limits for each selected category.
- Underwriters: When this endorsement is requested, underwriters should assess the increased concentration of value in specific property categories. While the perils covered don't change, the potential payout for a single loss involving these items increases. Underwriters should ensure that the requested increases are within company guidelines. The premium for this endorsement is typically calculated based on the amount of the increase for each category. It's important to verify that the correct endorsement is being applied based on the underlying homeowners policy form.