1. Forms
2. HO
3. HO-17-31

What the form is

The HO 17 31, titled "Unit-Owners Coverage C Special Coverage," is an endorsement to the HO 00 06 Unit-Owners Form. Its primary purpose is to upgrade the coverage for the insured's personal property (Coverage C) from a "named perils" or "broad form" basis to a "special form" or "open perils" basis. This means that instead of covering only losses caused by a specific list of perils, the endorsement provides coverage for direct physical loss to personal property from any cause, unless that cause is specifically excluded in the policy or the endorsement itself. This provides broader protection for the unit-owner's belongings.

Classes of business it applies to

This endorsement is used in personal lines insurance, specifically for individuals who own and reside in a condominium unit and are insured under an HO-6 policy. It is designed for unit-owners who desire more comprehensive protection for their personal possessions than what is offered by the standard HO-6 policy.

Real-world example: A condominium owner has an HO-6 policy. Their child accidentally spills paint all over an expensive rug, an event not typically covered under a standard named perils HO-6. If the HO 17 31 endorsement is attached to their policy, this type of accidental damage to their personal property (the rug) would likely be covered, assuming no specific exclusion applies.

Special considerations

• Usage with HO 00 06: This endorsement is specifically designed to be used with the HO 00 06 Unit-Owners Form.
• Occupancy Requirement: The endorsement typically requires that the named insured occupies the condominium unit where the covered personal property is located for the special coverage to apply.
• Exclusions are Key: While "special form" coverage is broad, it is not limitless. The endorsement will contain its own set of exclusions, and the underlying policy exclusions will also apply unless modified by the endorsement. It's crucial to understand what is not covered.
• Impact on Perils: It replaces the "Perils Insured Against" section for Coverage C in the base HO-6 policy.

Real-world example: If a unit-owner with this endorsement experiences a power surge that damages their high-end electronics, this loss might be covered under HO 17 31 even if power surge isn't a listed peril in the base HO-6, provided power surge is not excluded by the HO 17 31 or the main policy.

Key information for agents and underwriters

• Enhanced Coverage Explanation: Agents should clearly explain to clients the benefit of upgrading to "special form" coverage for their personal property, emphasizing that it covers a wider range of potential losses compared to "named perils." It's also important to manage expectations by clarifying that "all-risk" or "special form" does not mean every conceivable loss is covered, and a review of exclusions is necessary.
• Risk Assessment: Underwriters should recognize that this endorsement increases the insurer's exposure for Coverage C due to the broader perils covered. This may influence premium calculations.
• Addressing Coverage Gaps: This endorsement is a valuable tool for addressing potential coverage gaps for personal property under a standard HO-6. It is particularly beneficial for insureds with valuable personal belongings or those who prefer the peace of mind that comes with more comprehensive insurance.
• Comparison to Other Forms: Agents might compare this to the coverage provided on an HO-5 (Comprehensive Form) for personal property, as it aims to provide a similar breadth of coverage for contents within the HO-6 framework.
• Review State-Specific Versions: Edition dates and specific wording can vary by state, so it's important to use the correct state-approved version of the form.