1. Forms
2. HO
3. HO-06-92

What the form is

The HO 06 92, titled "Specific Structures Away From The Residence Premises - Replacement Cost Loss Settlement For Buildings," is an endorsement to a homeowners insurance policy. Its primary function is to provide replacement cost coverage for building structures that are not located at the insured's main ("residence") premises but are used in connection with it. Unlike blanket coverage that might apply to unscheduled structures, this endorsement requires each specific structure to be listed (scheduled) on the form to receive coverage. This endorsement ensures that if a covered loss occurs, the settlement for the scheduled building will be based on the cost to replace it with new materials of like kind and quality, without a deduction for depreciation, subject to policy limits and conditions. It is distinct from endorsement HO 04 92, which provides actual cash value for specific structures away from the residence premises.

Classes of business it applies to

This endorsement is used in personal lines homeowners insurance. It is suitable for policyholders who own structures on a property separate from their primary dwelling but still used for personal, residential purposes. Examples include:

• A detached garage or workshop located on a separate, nearby lot.
• A boathouse or storage shed at a lake or vacation property that is not the insured's primary residence but is used by the insured in connection with their residence premises.
• A cabana or guesthouse on a non-adjoining parcel of land used for family recreation.

The key is that the structure is used in connection with the residence premises and is not primarily for business or rental to others (unless specifically allowed by the policy or another endorsement).

Special considerations

• Scheduling Required: Each structure to be insured under this endorsement must be specifically described and a limit of liability shown in the schedule. Failure to list a structure means it will not be covered by this endorsement.
• Replacement Cost Basis: Coverage applies on a replacement cost basis, which typically requires the insured to actually repair or replace the damaged property to receive the full replacement cost value. If not repaired or replaced, the settlement might revert to actual cash value.
• Eligible Structures: The endorsement applies to "buildings," which generally means structures with walls and a roof.
• Usage Restrictions: Structures used for business purposes, used as a dwelling (other than for incidental occupancy related to the main residence), or rented out to individuals who are not tenants of the primary dwelling are typically not eligible for coverage under this endorsement.
• Form Compatibility: This endorsement can be used with most standard homeowners forms (e.g., HO 00 02, HO 00 03, HO 00 05) but is not for use with forms HO 00 08 (Modified Coverage Form) and HO 00 14 (Contents Comprehensive Form).
• Introduction Date: This form was introduced as part of the Insurance Services Office (ISO) 2022 homeowners program.

Key information for agents and underwriters

• Agents: It is crucial for agents to have a detailed discussion with the insured to identify all eligible structures away from the residence premises that require coverage. Accurate descriptions and appropriate limits of liability for each scheduled structure are essential. Agents should explain the replacement cost provisions and any requirements for obtaining full replacement cost value after a loss. They should also clarify the difference between this endorsement and HO 06 91 (blanket coverage) or HO 04 92 (actual cash value).
• Underwriters: Underwriters must carefully evaluate the risk associated with each scheduled structure. Factors to consider include the structure's location (e.g., proximity to potential hazards, accessibility), construction type, age, condition, and specific use. Since the structures are away from the primary residence, the risk of vandalism or delayed discovery of damage might be higher. The scheduled limit of liability should be reviewed for adequacy, ensuring it reflects the current replacement cost of the structure. Underwriters should also verify that the use of the structure complies with the endorsement's terms and does not fall under excluded categories like business use. They should also be aware this is a multistate form.