HO-2 Insurance Policy: What It Is and How It Works

I know that shopping for home insurance can be overwhelming and daunting, especially when you come across various terms and types of coverage. In other words, you do not know what or which to pick. One of the main types of homeowners insurance policies is the HO-2 insurance policy.

HO-2 Insurance Policy: What It Is and How It Works

It is suitable for property owners, but not everyone can refer to this insurance type as such. So what is an HO-2 insurance policy? What makes it different from other types of home insurance quotes? Normally, the coverage for an HO-2 insurance policy is precise since it is called peril insurance coverage and can be used when one of the mentioned risks happens.

What is an HO-2 Insurance Policy?

An HO-2 insurance policy is also known as a broad-form home insurance policy that offers more limited coverage, unlike an HO-3 policy. This type of insurance offers protection for your personal property and home against certain causes of loss or a list of threats and risks.

Apart from this, since HO-2 insurance policies provide less coverage, they are cheaper and less expensive, however, you are exposed to additional risk.

How Does It Work?

An HO-2 insurance policy simply provides financial protection for your home and your personal property. However, this is only for the particular threats mentioned in the policy. Thus, if your home structure or personal property is destroyed or damaged by one or any of the mentioned perils, your insurance provider will replace or repair it up to your policy’s limits and minus your deductibles.

What Does HO-2 Insurance Policy Cover?

Now that you know what HO-2 is and how it works, you must be curious about what it covers, right? This is why I will be listing the 16 perils mentioned that will be covered by an HO-2 insurance policy. They include:

  1. Windstorm or hail
  2. Vehicles damage
  3. Vandalism
  4. Accidental or sudden damage from a non-natural electrical current
  5. Falling objects
  6. Overflow or accidental discharge of steam or water from within a plumbing, heating, or air conditioning system
  7. Riot
  8. Volcanic eruption
  9. Weight of sleet, ice, or snow
  10. Fire or lightning
  11. Theft
  12. Freezing of a plumbing, heating, and air conditioning system
  13. Smoke
  14. Aircraft damage
  15. Explosion
  16. Accidental and unexpected tearing of the hot water, steam heating, or air conditioning system

What Does It Not Cover?

What do HO-2 policies exclude? Just like other homeowners policies, HO-2 policies do not cover earthquake and flood damage. Other threats that are not covered include:

  • Governmental action
  • Intentional loss
  • Nuclear hazard
  • Earth movement
  • War
  • Floods
  • Ordinance or law
  • Earthquakes
  • Maintenance damage
  • Neglect
  • Pest infestation

How Much Does HO-2 Insurance Policy Cost?

The cost of an HO-2 policy can differ based on different elements. Some of them include your deductible, location, coverage limits, the value of your home, and even the insurance you choose.

On average, the cost of homeowners insurance can fall between a few hundred and a couple of thousand per year. In addition, HO-2 policies are less expensive than HO-3 policies because they provide less coverage.

How to Get an HO-2 Insurance Policy

Obtaining an HO-2 insurance policy is quite similar to other types of home insurance policies. Still, keep in mind that this process involves several steps, but you need to carefully follow them to successfully purchase a quote:

  • Determine your coverage needs.
  • Look around and compare quotes.
  • Research insurance providers.
  • Apply for the quote.
  • Review the quote carefully to understand it.
  • Agree and purchase the policy.

Although the application procedure is different among insurance companies, this is still the basic step that you will eventually undergo.

HO-2 vs. HO-3 Policies

The major and significant difference between HO-2 and HO-3 homeowners insurance policies is their coverage scope. HO-2 policies provide limited protection and also cover only certain perils for the personal property and home of the policyholder. On the other hand, HO-3 policies offer wider coverage for the home against all threats except those that are excluded and not mentioned in the coverage section of the policy. The personal property of the policyholder is also covered for the mentioned risks, which makes HO-3 more commonly used because of its comprehensive coverage structure.


Can I get additional coverage on an HO-2 policy?

Yes, you can often purchase additional coverage or endorsements for risks or threats not covered under the standard HO-2 policy.

Is an HO-2 policy right for me?

An HO-2 policy might be right for you if you are looking for a more affordable option that covers specific perils, especially if your home is not at risk for the perils not included in the coverage.

How do I file a claim if something happens?

You should contact your insurance agent or company as soon as possible to report the loss and start the claims process, providing any necessary documentation and following their guidance.

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