Guides
HO-8 policies for older homes
The HO-8 is a named-perils form that pays to repair an older home with common modern materials, not to restore its original plaster, tile and trim.
The HO-8 is the ISO "modified coverage" homeowners form (HO 00 08), written for owner-occupied homes where rebuilding the house as it stands would cost far more than the house would sell for, or where the original materials and craftsmanship are obsolete. It insures against ten named perils rather than all risks, and it pays building losses by what it costs to repair with common, functionally equivalent materials, not by what it costs to restore the original. That makes it cheaper to write for the insurer and thinner for you than an HO-3, so it is worth knowing exactly what you give up.
What the HO-8 is for
The standard forms assume that the cost to rebuild a home tracks the price the home would fetch. For many older houses it does not. Say a 1910 row house in a city neighborhood would sell for $220,000 but cost $450,000 to rebuild with plaster walls, a slate roof and millwork nobody stocks. An insurer that writes an HO-3 on that house must insure it to full replacement cost, collect premium on a limit far above what the property is worth, and pay to rebuild all of it after a total loss. That creates a moral hazard, since an owner could come out ahead if the house burned.
The HO-8 was designed for this mismatch. IRMI's definition describes it as built for homes where replacement cost may be well above market value, or where restoration with antiquated materials and methods costs more than current, common ones. It changes how building losses are settled and what the insurer expects for insurance to value, so a carrier that will not write an old urban house on an HO-3 may still offer it on an HO-8.
It is a small corner of the market. In the NAIC's report on 2023 data (published July 2026), the HO-8 accounted for about 267,000 house-years of exposure, against roughly 70.7 million for all owner-occupied forms, well under 1% (our calculation from NAIC Table 4). Availability varies by carrier and state, so your agent may not have raised it.
The ten named perils
Unlike the HO-3, which covers the dwelling against any direct physical loss that is not excluded, the HO-8 covers the dwelling, other structures and belongings only for named perils. According to the trade publisher FC&S' analysis of the May 2011 edition (PropertyCasualty360), those are:
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Aircraft
- Vehicles (not a vehicle owned or operated by a resident of the dwelling)
- Smoke (sudden and accidental, with exclusions for things like fireplace smoke)
- Vandalism or malicious mischief (suspended if the home has been vacant for more than 60 consecutive days)
- Theft
- Volcanic eruption
FC&S contrasts this with the sixteen named perils of the HO-2. Water damage from a burst pipe or an appliance, falling objects, the weight of ice and snow, and freezing are not on the HO-8 list, though all four appear in the HO-2's list and are generally covered by the HO-3. If you are comparing forms, named perils vs open perils coverage explains how the two approaches decide a claim, and Homeowners policy types: HO-1 through HO-8 explained places the HO-8 among its siblings.
Theft is cut back as well. FC&S reports a limit of $1,000 for theft on the residence premises, no coverage for theft away from home unless an endorsement adds it, and none of the separate special limits for jewelry, firearms or silverware. A theft-increase endorsement (HO 04 30) can raise the cap where the state allows it. FC&S also notes that debris removal sits inside the limit with no extra 5% allowance, and that the form carries no collapse coverage and no ordinance or law coverage coverage.
How building losses are paid
This is the part that matters most. Under the May 2011 form, as FC&S summarizes it, Coverage A and B building losses are settled one of two ways.
If you repair or replace within 180 days, at the same site. The insurer pays the least of your limit, or the necessary amount you actually spend. That amount is capped at what it would cost to use common construction materials and methods that are functionally equivalent to, and less costly than, obsolete, antique or custom ones. You cannot rebuild elsewhere and collect on this basis.
If you do not repair or replace. The insurer pays the least of three numbers: your limit, the building's market value at the time of loss excluding land value, or the cost to repair or replace with like kind and quality less allowance for physical deterioration and depreciation.
Belongings, awnings, carpeting, household appliances and outdoor equipment are paid at actual cash value, not more than the cost to repair or replace. In states that require actual cash value for buildings, the loss settlement paragraph is replaced by an ACV endorsement (FC&S cites HO 04 81 for the 2011 edition).
The form also states that "repair" and "replace" do not include the added cost of complying with building codes. If your city requires rewiring, a new stair or a fire-rated assembly to rebuild, that cost is yours unless you have bought separate protection; see ordinance or law coverage: paying to rebuild to code.
A hypothetical loss
Say a kitchen fire damages the plaster-and-lath walls and ceiling in two rooms of a 1910 house. A restoration plasterer prices the work at $14,000. A general contractor prices drywall, which does the same job as a wall surface, at $6,000. Under an HO-8 loss settlement the insurer pays toward $6,000, the common-materials figure, less your deductible. The extra $8,000 for matching the original plaster is yours.
Now say the same house is destroyed and you choose not to rebuild. Your dwelling limit is $450,000, but the building's market value, without the lot, is $250,000. If the other two numbers are higher, $250,000 is the ceiling on payment, not the limit on your declarations page. These are invented figures, not market prices. Real results depend on your form, your state's endorsements and the adjuster's estimate.
HO-8 compared with an HO-3
| Feature | HO-8 (HO 00 08) | HO-3 (HO 00 03) |
|---|---|---|
| Dwelling coverage basis | Ten named perils | Open perils (all direct physical loss not excluded) |
| Belongings | Named perils | Sixteen named perils |
| Building loss settlement | Repair cost with common materials, or market value excluding land if not repaired | Replacement cost without depreciation if insured to 80% of replacement cost |
| Theft | Limited, on premises only unless endorsed | Covered, with special limits |
| Ordinance or law | Not covered | 10% of Coverage A as additional coverage |
| Typical use | Older homes where rebuild cost far exceeds market value | Most owner-occupied homes |
The HO-3 column is from the 2011 ISO form text; the HO-8 column rests on the FC&S analysis. Your insurer's own form and your state's amendatory endorsements decide what applies to you. For the HO-3's detail, see The HO-3 policy explained: coverages, exclusions and gaps.
The NAIC data show an average HO-8 premium of $1,071 in 2023, compared with $1,737 for the HO-3 (same report, data year 2023). Do not read that as a saving. The HO-8 covers fewer perils and pays building losses on a narrower basis, and the homes behind each number differ, so the averages do not compare like with like.
When an HO-8 is not what you want
You may be offered an HO-8 because the insurer's underwriting guidelines treat the house as too old or too costly to rebuild for an HO-3. That is a legitimate offer, but it is not the only route.
- An HO-3 with functional replacement cost. ISO's HO 05 30 endorsement puts a similar repair-cost settlement on an HO-3 or HO-5, and HO 05 31 falls back to actual cash value where that is higher. The perils stay open. The trade-off is the same on the building: you are paid for modern equivalents. According to a Florida coverage-law commentary, HO 05 30 pays on that basis only if the building is insured to at least 80% of its functional replacement cost.
- A full replacement cost HO-3 with an ordinance-or-law endorsement, if the insurer will write the house that way and you want original materials. Some historic and custom homes are written this way, with a specialized valuation; see insuring a historic home.
- A high-value or specialty carrier, for houses with irreplaceable detail.
Age drives more than the form. Wiring, plumbing and roof condition matter to eligibility whether you are offered an HO-3 or an HO-8, and how the age of your home affects insurance covers how insurers weigh them.
Lender requirements
If you have a mortgage, the HO-8 may not satisfy your lender. Fannie Mae's Selling Guide (B7-3-02, version dated August 5, 2026) says a 1-4 unit property's policy "should be written on a 'Special' coverage form or equivalent" and "must provide coverage on a replacement cost basis," with roofs the stated exception. A named-perils form that pays repair cost with common materials is a different product. Freddie Mac's Guide Bulletin 2026-C uses similar language. Servicers apply the rules, so ask your lender before closing, not after the first notice arrives. what mortgage lenders require from your homeowners policy explains what mortgage companies look for.
Questions to ask before you accept an HO-8
- Which form edition and which state endorsements apply? Ask for the form number and the declarations page.
- Is building loss settled at functional replacement cost, actual cash value or market value, and what does the 180-day rule require of me?
- Which perils are covered for the dwelling and for my belongings? Is water damage from a burst pipe included?
- What is the theft limit, and does it apply away from home?
- Can I add ordinance or law coverage coverage, or is it excluded entirely?
- Would the insurer write an HO-3 with a functional replacement cost endorsement instead, and what would the price difference be?
- Will my lender accept this form?
A home replacement cost estimator will show you what your house would cost to rebuild, and which homeowners policy form fits your home? helps match a form to your home. To understand why the rebuild figure and the sale price diverge, read replacement cost vs market value: why your home's price is the wrong number.
Key takeaways
- The HO-8 (HO 00 08) is a named-perils form for owner-occupied homes whose rebuild cost far exceeds market value; it covers ten perils and limits theft.
- Building losses are paid at the cost of common, functionally equivalent materials if you repair within 180 days at the same site, or at the least of limit, market value (without land) and depreciated repair cost if you do not.
- It does not cover code-upgrade costs, and your original plaster, tile and trim will not be restored at original-material prices.
- Alternatives exist, including an HO-3 with a functional replacement cost endorsement; ask what each costs and what each pays.
- Check your lender's requirements and your own policy form. Fannie Mae and Freddie Mac set replacement cost and special-form expectations that a modified form may not meet.