1. Forms
2. HO
3. HO-DS-03

Form HO DS 03: Homeowners 3 - Special Form Declarations

The HO DS 03, titled "Homeowners 3 - Special Form Declarations," is a critical document in personal lines insurance. It serves as the personalized "cover page" for the HO 00 03 Special Form homeowners policy, which is one of the most common homeowners insurance policies in the United States. This declarations page essentially customizes the broader HO 00 03 policy form by detailing the specific agreements between the insurance company and the named insured. It provides a snapshot of who and what is covered, for how much, and under what conditions for the policy period.

Key information found on the HO DS 03 includes:

• Named Insured(s) and Mailing Address: Clearly identifies the individual(s) or legal entities whose property and liability are covered.
• Property Location: Specifies the address of the insured dwelling. This is crucial as coverage is tied to this specific location.
• Policy Period: States the exact start and end dates of the coverage.
• Agent/Broker Information: Contact details for the insurance agent or agency handling the policy.
• Coverages and Limits of Liability: This is a core section, outlining the various coverage parts and the maximum amount the insurer will pay for a covered loss under each. Common coverages detailed include:
  • Coverage A - Dwelling: Protection for the main structure of the home.
  • Coverage B - Other Structures: Coverage for detached structures like garages or sheds.
  • Coverage C - Personal Property: Protection for the contents of the home, such as furniture and clothing.
  • Coverage D - Loss of Use: Covers additional living expenses if the home becomes uninhabitable due to a covered loss.
  • Coverage E - Personal Liability: Provides coverage if the insured is found legally responsible for bodily injury or property damage to others.
  • Coverage F - Medical Payments to Others: Covers medical expenses for guests injured on the property, regardless of fault.
• Deductibles: Specifies the amount the insured must pay out-of-pocket for a covered loss before the insurance coverage kicks in. This can vary by peril (e.g., a separate wind/hail deductible).
• Premium: The total cost of the policy for the stated policy period.
• Attached Endorsements: Lists any endorsements that modify the standard HO 00 03 policy language. This is vital as endorsements can add, remove, or alter coverage.
• Mortgagee Information: Details of any lender with a financial interest in the property.

Classes of Business It Applies To

The HO DS 03 is exclusively used in personal lines insurance, specifically for owner-occupied, single-family dwellings, and in some cases, townhouses. It is not designed for renters (who would typically use an HO-4 policy) or condominium unit owners (who would use an HO-6 policy). The HO 00 03 policy, for which the HO DS 03 serves as the declarations, is intended for individuals or families who own and reside in their home as their primary residence.

Real-world examples include:

• A family purchasing a new single-family suburban home.
• An individual who owns and lives in a detached house in a city.
• Owners of some types of townhouses where they are responsible for insuring the entire structure.

Special Considerations

Several important points should be noted regarding the HO DS 03 and its associated HO 00 03 policy:

• "Special Form" Coverage (Open Perils for Dwelling): The HO 00 03 is a "special form" policy, meaning Coverage A (Dwelling) and Coverage B (Other Structures) are typically covered on an "open perils" or "all-risk" basis. This means they are covered for all direct physical losses unless the cause of loss is specifically excluded in the policy. This is a broader form of coverage compared to "named perils."
• Named Perils for Personal Property: Conversely, Coverage C (Personal Property) is generally covered on a "named perils" basis. This means personal belongings are only covered for losses caused by perils specifically listed in the policy (e.g., fire, theft, windstorm).
• Requirement to Insure to Value: To ensure full replacement cost coverage for the dwelling (without deduction for depreciation) after a loss, homeowners are typically required to insure their home for at least 80% of its replacement cost value (this percentage can vary). If not, a coinsurance penalty might apply, or loss settlement might revert to Actual Cash Value (ACV).
• Exclusions are Key: While "open perils" for the dwelling is broad, it's crucial to understand the exclusions listed in the HO 00 03 policy. Common exclusions include flood, earthquake, neglect, war, and intentional acts. Coverage for some excluded perils, like flood or earthquake, may be available through separate policies or endorsements.
• Endorsements Modify Coverage: The list of endorsements on the HO DS 03 is critical. These can significantly alter the standard policy. For example, an endorsement might add replacement cost coverage for personal property (upgrading from ACV), increase limits for certain types of personal property (like jewelry or firearms), or add coverage for specific risks like water backup and sump overflow.
• Accuracy is Paramount: All information on the HO DS 03, such as the named insured, property address, and coverage limits, must be accurate. Errors can lead to claim denials or insufficient coverage.

Key Information for Agents and Underwriters

For insurance agents and underwriters, the HO DS 03 and the underlying HO 00 03 policy present several practical considerations:

• Risk Assessment: Underwriters will heavily scrutinize the information that informs the HO DS 03, such as the property's age, construction type, location (e.g., proximity to coast, flood zones, high-crime areas), claims history, and protective features (e.g., security systems, fire alarms). This data directly influences eligibility and pricing.
• Pricing and Premium Calculation: The limits of liability, chosen deductibles, any optional coverages selected via endorsements, and the overall risk profile of the insured and property will determine the final premium reflected on the declarations page.
• Identifying Coverage Gaps: Agents have a responsibility to help clients understand potential coverage gaps. For instance, standard HO 00 03 limits for certain personal property (e.g., jewelry, firearms, business property) are often low. Agents should discuss options for scheduling valuable items or adding endorsements to increase these sub-limits. They also need to highlight major exclusions like flood and earthquake and discuss separate policies if needed.
• Explaining Policy Terms: The HO DS 03 is a summary, but agents must be prepared to explain the more detailed provisions of the HO 00 03 policy form, including the differences between open perils and named perils, replacement cost versus actual cash value, and the implications of various exclusions and conditions.
• Endorsement Management: Underwriters and agents must ensure that all requested and necessary endorsements are accurately listed on the HO DS 03 and that the client understands their impact on coverage.
• Compliance and Documentation: The HO DS 03 is a legal document. Maintaining accurate and complete records, including any discussions about coverage choices and offered endorsements, is crucial for E&O (Errors and Omissions) prevention.
• Market Value vs. Replacement Cost: A common point of confusion for homeowners is the difference between their home's market value and its replacement cost. Agents must explain that homeowners insurance is designed to cover the cost to rebuild the home, not its sale price, which includes land value. The Coverage A limit on the HO DS 03 should reflect the estimated replacement cost.