What is the limit of theft coverage on an HO-8 form policy?

The limit of theft coverage on an HO-8 form policy is based on the actual cash value of what was stolen. This means that in the event of a theft, the insurance will cover the value of the items at the time of the loss, taking into account depreciation. Actual cash value is calculated as the replacement cost minus depreciation, and this method of valuation is standard for many homeowners' policies designed for older homes or homes with specialized construction.

The other options do not accurately describe the coverage available in an HO-8 policy. The first option refers to market value, which does not apply here since market rates can fluctuate and do not reflect the actual loss experienced due to theft. The second option notes replacement cost, which is generally higher than actual cash value and is not typically used in HO-8 policies for theft. Lastly, stating that no limit applies would be misleading, as insurance policies generally impose limits on coverage, even under HO-8 forms. Thus, understanding the basis for calculating coverage under an HO-8 is essential for those who hold or are considering such policies.