1. Forms
2. HO
3. HO-04-66

What the form is

The HO 04 66, titled "Coverage C Increased Special Limits of Liability," is an endorsement to specific ISO (Insurance Services Office) homeowners insurance policies. It is designed for use with Form HO 00 05 (Homeowners 5 – Comprehensive Form), Form HO 00 04 (Homeowners 4 – Contents Broad Form) when the HO 05 24 (Modified Coverage Form – HO 00 04) endorsement is attached, and Form HO 00 06 (Homeowners 6 – Unit-Owners Form) when the HO 17 31 (Unit-Owners Modified Coverage Form – HO 00 06) endorsement is attached. The primary purpose of this endorsement is to increase the special, or sublimits, of liability that apply to certain categories of personal property under Coverage C (Personal Property). Standard homeowners policies typically cap the amount payable for loss to specific types of valuable items such as money, securities, watercraft, trailers, jewelry, watches, furs, firearms, silverware, goldware, pewterware, and business property. The HO 04 66 allows policyholders to purchase higher limits for these specified categories of property, providing more adequate coverage if these items are damaged or stolen. It is important to understand that this endorsement increases these specific sublimits; it does not increase the overall aggregate limit for Coverage C.

Classes of business it applies to

This endorsement is used exclusively in personal lines homeowners insurance. It is relevant for individuals who possess valuable personal property items whose worth exceeds the standard special limits provided in their applicable homeowners policy (HO 00 05, or HO 00 04/HO 05 24, HO 00 06/HO 17 31).

Real-world examples:

• An insured under an HO 00 05 policy who owns a jewelry collection valued at $10,000, when the base policy only provides a $2,000 sublimit for theft of jewelry.
• A condominium unit owner with an HO 00 06 (with HO 17 31) policy who has an extensive collection of firearms or silverware that is more valuable than the standard policy sublimits.
• A renter with an HO 00 04 (with HO 05 24) policy who has business property on the residence premises exceeding the base form's special limit for such property.

Special considerations

• Specific Form Applicability: This endorsement is specifically tailored for use with the HO 00 05 form, or the HO 00 04 and HO 00 06 forms when they are modified to provide broader, open perils coverage on personal property similar to the HO 00 05. For other homeowners forms that provide named perils coverage for personal property (like the standard HO 00 02, HO 00 03, or unmodified HO 00 04), the HO 04 65 endorsement serves a similar function of increasing special limits.
• Scheduled Increases: The increased limits for each applicable class of property are typically shown on the endorsement itself or in the policy declarations.
• No Change to Overall Coverage C Limit: Attaching this endorsement does not alter the total limit of liability for Coverage C – Personal Property. It only modifies the internal sublimits for the specified categories.
• Perils Covered: The HO 04 66 addresses the amount of coverage for the specified property. The perils insured against are determined by the underlying homeowners policy (e.g., an HO 00 05 generally provides open perils coverage for personal property).
• Comparison to HO 04 65: The HO 04 66 is nearly identical to the HO 04 65 but is used when open perils coverage (special form coverage) applies to personal property, typically via the HO 00 05 or appropriately endorsed HO 00 04 or HO 00 06.

Key information for agents and underwriters

• Risk Assessment & Needs Analysis: Agents should thoroughly discuss with applicants and insureds the nature and value of their personal property. Specific inquiries should be made about items that commonly fall under special limits (jewelry, firearms, silverware, business property, etc.) to identify potential coverage gaps.
• Explaining Sublimits: It's crucial that policyholders understand that standard homeowners policies contain these special limits. The HO 04 66 provides a means to address these limitations for specific forms.
• Pricing: The additional premium for this endorsement will vary based on the types of property for which limits are increased and the amount of the increase selected for each category.
• Underwriting Guidelines:
  • Verify that the HO 04 66 is being attached to the correct underlying policy form (HO 00 05, or HO 00 04 with HO 05 24, or HO 00 06 with HO 17 31).
  • Ensure the schedule clearly indicates the new, increased limit of liability and the total limit of liability for each class of property being modified.
  • While this endorsement increases limits, for extremely valuable individual items (especially jewelry, furs, fine arts), a Scheduled Personal Property Endorsement (e.g., HO 04 60 or HO 04 61) or a separate Personal Articles Floater might offer more comprehensive, often 'agreed value' coverage and broader perils. Agents should discuss these alternatives if the client's needs exceed what the HO 04 66 can provide.
• Documentation: For significant increases in value, especially for items like jewelry, underwriters may require appraisals or receipts to substantiate the values being insured.