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HO-2 Home Insurance Policy

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The HO-2 home insurance policy is a form that details specifically covered perils. This means this insurance policy will only cover any damages that are caused by the listed perils on the policy. Nevertheless, some insurance companies offer unique HO-2 policies which include liability and personal property coverage.

Finding the right insurance policy for your home make take more than just going to your nearest insurance provider and filling out forms. Just like any other insurance out there, there are different types of home insurance policies that you can buy. The type of policy that a homeowner will purchase depends greatly on the kind of coverage that they need.

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Everything you want to know about HO-2 policy

Insurance policies are typically written on a standard form that is used by the insurance industry. These standard forms make it easier to regulate the kind of insurance being sold in the market. To put it simply, HO-2 is a kind of insurance form. HO-2 is also sometimes called a Broad Form.

Perils covered by HO-2 insurance

Just like its predecessor, HO-1 (Basic Form), HO-2 covers 10 specific perils plus some more. HO-2 covers a total of 16 perils these include:

  • Lightning or fire
  • Windstorm or hail
  • Explosions
  • Damage from vehicles (unless caused by the insured)
  • Damage from aircrafts
  • Riots or civil commotion
  • Theft (with limited liability of up to $1,000)
  • Malicious mischief or vandalism
  • Smoke
  • Volcanic eruptions
  • Falling objects
  • Accidental discharge of steam or water
  • Weight damage due to snow, ice, or sleet
  • Freezing of household systems
  • Accidental tearing, cracking, bulging, or burning of pipes or household systems
  • Accidental damage due to artificially generated electrical current

Since HO-2 is an insurance policy that lists the perils it covers, it will only pay for any damages that are caused by the items included in the list. In case your home incurs any damages that are not named, repairs and any new items will have to be an out-of-pocket expense.

Unlike the limited basic form (HO-1) policy, HO-2 includes personal liability and personal property coverage which are crucial added protection. The two types of coverage are useful in crucial events such as if you experience a fire in your home. Should this happen, your insurance policy will pay for the repair of your home including reimbursing any damage to the items inside. Additionally, if the fire also damages your neighbor’s home, your insurance will also pay for any damage including medical expenses.

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What is not covered by HO-2 policy

Even when HO-2 has broader coverage than HO-1, there are crucial common risks that are not included in the list.

  • Floods – In case your home experiences flooding, sewer backup, slow leaks, or other forms of water damage you will not be able to claim compensation for repairs.
  • Earthquakes – In case there is an earthquake in your area and your home incurs any damage you will not able to claim for any compensation. So if your home is located in an earthquake-prone area, you may want to get additional insurance coverage.

Many homeowners consider HO-2 as a so-so policy. It is not as inadequate as HO-1 but still not as comprehensive as most standard HO-3 home insurance policies. Nonetheless, HO-2 home insurance can be a good choice especially if your home is not at any risk of flooding or earthquake damage. Some mortgage lenders, however, will not allow this basic insurance policy and will require open-peril HO-3 insurance. It is best that you talk to them. To be able to get the best insurance policy, you need to know what strikes a balance between what you need and what your budget will allow. Make sure to do thorough research before settling at one insurance policy.

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