An owner of a 110-year-old Victorian in San Francisco cannot find a standard HO-3 policy because the replacement cost exceeds the market value by a wide margin. Which homeowners form is designed for older homes and settles dwelling losses on an ACV (actual cash value) basis?
a.HO-4
b.HO-2
c.HO-5
d.HO-8
Explanation
The HO-8 Modified Coverage Form is designed for older or historic homes whose replacement cost greatly exceeds market value. Dwelling losses are paid on an actual cash value basis (or repair-cost basis using common materials and methods) instead of full replacement cost, making coverage available where an HO-3 would not be affordable or insurable.
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