What the form is
The HO 17 34, titled "Unit-Owners Modified Other Insurance and Service Agreement Condition," is an endorsement to the Homeowners Form HO 00 06 (Unit-Owners Form). Its primary function is to alter the standard 'Other Insurance' condition within the unit-owner's policy. This modification is crucial for clarifying how the individual unit-owner's insurance policy will respond to a loss in conjunction with the condominium association's master insurance policy. Specifically, it often addresses situations where a loss is covered by the master policy but falls within the master policy's deductible, allowing the unit-owner's Coverage A (Dwelling) to contribute towards that deductible.
Classes of business it applies to
This endorsement is designed for individuals who own a condominium unit and are insured under an HO 00 06 policy. It is particularly relevant in scenarios where the condominium association's master insurance policy has a significant deductible.
Real-world example: Imagine a fire damages several units in a condominium building. The total damage is covered by the association's master policy, but the master policy has a $50,000 deductible. If a unit-owner has the HO 17 34 endorsement, their individual HO 00 06 policy, specifically Coverage A, may be able to cover their share of that $50,000 master policy deductible for damages to their unit's building property. Without this endorsement, the unit owner might be personally responsible for that portion of the master policy deductible.
Special considerations
The necessity and impact of the HO 17 34 can depend on the specific edition date of the underlying HO 00 06 policy and the insurance carrier's interpretation of how the unit-owner's policy interacts with the master policy. Some newer editions of the HO 00 06 might already include language that favorably addresses the master policy deductible, potentially making this endorsement less critical. However, for other versions, particularly older ones like those associated with the HO-2000 program, this endorsement can be vital to ensure Coverage A applies to the master policy deductible. It is often recommended that unit-owners add this endorsement if their insurer offers it, especially when the condominium association's master policy deductible is high, to avoid unexpected out-of-pocket expenses. The endorsement essentially helps 'bridge the gap' between the master policy deductible and the unit-owner's own policy coverage.
Key information for agents and underwriters
Agents: It is crucial for agents to inquire about the condominium association's master policy, specifically the deductible amount. They should then review their client's HO 00 06 policy to determine how it would respond to a loss that falls within the master policy deductible. If there's a potential gap, the HO 17 34 endorsement should be recommended. Agents should explain that the HO-6 is often considered 'excess' over the master policy, and this endorsement helps clarify payment responsibilities for the master policy deductible.
Underwriters: When assessing risk for a unit-owner, underwriters should consider the master policy's deductible. A high master policy deductible increases the potential exposure for the unit-owner's policy if the HO 17 34 is in place (or if the base HO 00 06 form provides similar coverage). The presence or absence of this endorsement, and the specific language of the unit-owner's policy regarding the master policy, are important factors in understanding the potential payout under Coverage A for losses that also involve the master policy. The wording can vary by carrier, so understanding the specific insurer's approach is key.