1. Forms
2. HO
3. HO-17-32

What the form is

The HO 17 32, titled "Unit-Owners Coverage A Special Coverage," is an endorsement to the HO 00 06 Unit-Owners insurance policy. Its primary function is to upgrade the coverage for the condominium unit's building items (Coverage A) from a "named perils" or "broad form perils" basis to a "special perils" (often referred to as "all-risk") basis. This means that instead of covering losses only from a list of specified perils, the endorsement provides coverage for direct physical loss to the property described in Coverage A, unless the cause of loss is specifically excluded in the policy or endorsement. Coverage A typically includes alterations, appliances, fixtures, and improvements which are part of the building contained within the unit owner's residence premises, items of real property pertaining exclusively to the residence premises, and property that is the unit owner's insurance responsibility under a corporation or association of property owners agreement.

Classes of business it applies to

This endorsement is specifically designed for individuals who own a condominium unit and are insured under an HO 00 06 policy. It applies to the building property portion of their unit for which they are responsible according to their condominium association agreement.

Real-world example: A condominium unit owner has an HO 00 06 policy. The standard policy covers building items on a named perils basis. If wind-driven rain enters through a window frame (not an open window) and causes damage to the drywall and built-in cabinetry (considered part of Coverage A), this loss might not be covered under the basic named perils. However, if the HO 17 32 endorsement is attached, this type of loss would generally be covered because "special perils" coverage is broader and would cover such an event unless specifically excluded.

Special considerations

• This endorsement specifically modifies Coverage A (Building Property). For similar "special perils" coverage on personal property (Coverage C), a different endorsement, such as HO 17 31 Unit-Owners Coverage C Special Coverage, would be required.
• When this endorsement is added, the "Perils Insured Against" section for Coverage A in the base HO 00 06 policy is replaced by the terms of the HO 17 32. It's important to review the exclusions listed in the endorsement and the main policy, as "special perils" coverage still has exclusions (e.g., wear and tear, flood, earthquake, intentional acts).
• Unit owners should clearly understand their insurance responsibilities as outlined in their condominium association's by-laws or master deed to ensure they have adequate Coverage A limits and the correct endorsements. The association's master policy and the unit owner's individual policy need to work together.

Key information for agents and underwriters

• Agents: This endorsement is a valuable option to offer clients with an HO 00 06 policy, as it significantly broadens protection for their real property investment within the unit. Agents should explain the difference between named perils and special perils coverage and how this endorsement enhances their policy. It's crucial to ensure the Coverage A limit accurately reflects the cost to repair or replace the building items for which the unit owner is responsible.
• Underwriters: By changing Coverage A to a special perils basis, the insurer assumes a broader risk. Underwriting considerations may include the age and condition of the condominium building, the quality of construction, and the specific items included in the unit owner's Coverage A. While it provides broader coverage, the endorsement also incorporates typical "all-risk" exclusions to manage the increased exposure. This endorsement is specifically designed for use with the HO 00 06 form.