West Virginia Property and Casualty Licensing Practice Exam

What form offers the least coverage?

1. HO3

2. HO8

3. HO5

4. HO2

The correct answer is: HO8

The HO8 form is designed for older homes and provides limited coverage compared to other homeowners insurance forms. It is primarily intended for properties that may not be up to current building codes or values, thus leading to a more restricted coverage scope. This form typically covers only specific risks rather than the broader coverage provided by other types of homeowners policies. In contrast, the HO3 and HO5 forms offer more comprehensive coverage. The HO3 provides special form coverage for the dwelling, which is open perils, while the HO5 delivers even broader coverage, including personal property, on an open perils basis as well. The HO2 form is a broad form policy that covers more perils than HO8 but is still less comprehensive than HO3 and HO5 policies. The insurance coverage provided by the HO8 form is intended to match the actual cash value of the home, taking into consideration depreciation. Thus, for homeowners seeking minimum coverage, especially relevant for homes with unique characteristics or historical significance where the cost of replacement might be prohibitively high, the HO8 is the option that provides the least coverage among the available forms.