One of the most basic – and most affordable – home insurance policies is the HO-8. Generally, homeowners purchase this type of coverage for one of two reasons: they are either unable to get a different policy or they want coverage only for catastrophic losses.  The HO-8 plan protects your home and contents from the most common perils. These include damage due to:

–          Aircraft accidents
–          Falling objects
–          Fire incidents
–          Hail
–          Smoke or wind
–          Theft

Thus, the HO-8 is considered to be a ‘named perils policy.’ However, there are some aspects of this policy that homeowners may not be aware of.

HO-8 Is for Older Homes and Doesn’t Cover All Losses

In fact, HO-8 was designed to protect older homes from covered perils, because an old home is more difficult to replace than a newer home. This means that the policy only covers those homes which are fifty years or older and which are generally valued at $200,000 or less. To put things into perspective, only 122,000 homes in the state of Florida meet these criteria.

HO-8 doesn’t cover certain types of water  damage, such as the one experienced due to malfunction in a home’s plumbing system. Another costly and common peril not covered by HO-8 includes the danger of falling objects, unless the homeowner is able to prove that the incident occurred due to one or more of the common covered perils listed above.

And although the other HO-1 and HO-3 policies cover replacement costs, HO-8 does not. Instead, it covers the actual cash value, which means far less is paid out due to the already-aged home enduring years of deprecation.

Homes under HO-8 policies are excluded from mold coverage. Any accidental damage which occurs as the result of artificially-generated electrical currents is not covered. Even lighting, a naturally-generated form of electricity is not covered under the HO-8.

Requirements for the HO-8 

Homeowners applying for HO-8 coverage will likely have to ensure that basic updates have been made to the home’s electrical system. Generally, to be eligible for HO-8 coverage, a home must have service of at least 100 amps, have no aluminum or knob & tube wiring, as well as no fuses and portable heat sources. As well, the home must have working air conditioning, and window air conditioners are permitted.

Although this coverage is designed for the older home, it doesn’t cover all items or all perils. In a situation where a poor credit history resulted in an inability to obtain other types of insurance coverage, it can be a good idea to request a copy of your credit report. A thorough review will reveal any questionable items on the report that can be cleared up with a phone call. Other items, such as bankruptcy, liens and previous convictions may have to wait until such time as they can be removed from your report. Credit can be rebuilt, but this will also take time.