For some houses, it’s difficult or impossible to get coverage through a standard homeowners insurance policy. If you own or want to buy an older house that contains materials or features that would be prohibitively expensive to replace, you may have to take out an HO-8 homeowners insurance policy.
When Do You Need an HO-8 Policy?
An HO-8 homeowners insurance policy is typically required for a house that is more than 40 years old, is a historic landmark or is architecturally important for some other reason. Those types of properties often have materials and specially crafted design features that can’t be replaced or restored to their original standard using current building materials and methods, or that would cost too much to restore.
If your house has its original plumbing, HVAC system or electrical wiring, a standard homeowners insurance policy may not be an option. If the house gets damaged and a key system has to be rebuilt to current standards, the cost can be incredibly high. Homeowners insurance companies may therefore refuse to issue a standard policy at all. You may instead have to take out an HO-8 policy.
How Does an HO-8 Policy Compare to Other Homeowners Insurance Policies?
In some ways, an HO-8 policy is similar to other types of homeowners insurance. Dwelling coverage applies to the house itself and to other structures on the property, such as a fence and a detached garage. If you need to move out while your house is being repaired, your insurance policy will provide coverage for additional living expenses.
HO-8 homeowners insurance covers personal property. A policy may have sub-limits that restrict coverage for certain types of items, such as jewelry. If you need additional coverage, you can get an endorsement in exchange for higher premiums.
An HO-8 policy includes liability coverage. It will pay if someone gets injured at your home or suffers property damage because of the negligence of you or a member of your family.
Unlike some other types of homeowners insurance policies, an HO-8 policy only covers a specific list of named perils. If your home or personal property gets damaged or destroyed by another peril, you won’t be covered, unless you take out a separate policy or endorsement that covers that peril.
An HO-8 policy pays actual cash value. That means that if your house or belongings get damaged or destroyed, you won’t get enough money to restore your home to its original condition or to replace an object with a comparable new one. Instead, you will get an amount of compensation that takes depreciation into account. You may be to get replacement cost coverage in exchange for higher premiums.
Talk to Your Insurance Agent
It may be challenging to find appropriate homeowners insurance coverage for an older house. Contact your insurance agent to discuss your options and premiums before you decide whether to buy the house you’re considering.
