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What are HO-2 insurance policies?

by Cove Road Real Estate 10/30/2023

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An HO-2 insurance policy is a type of homeowners insurance policy offering coverage for named perils. Many homeowners opt for this type of coverage when choosing how to insure their home and personal belongings.

Here is some more key information about HO-2 policies:

HO-2 insurance: policy definitions & details

An HO-2 policy is also sometimes referred to as "peril policy," since it only offers coverage for a specific list of events.

What is not covered by HO-2 policies?

While the list of perils might seem comprehensive, there are some perils - like sinkholes - are excluded.

You'll also need earthquake insurance or flood insurance to protect you in an area prone to these events.

Who needs an HO-2 insurance policy?

An HO-2 includes dwelling coverage, other structures coverage, personal property coverage and liability coverage.

While not "open peril" policies, the perils included will cover most claims.

HO-2 vs. HO-3

An HO-3 policy provides much broader coverage than a HO-2. However, while a HO-3 covers dwelling and other structures with open peril coverage, your personal property may still be subject to a list of named perils.

Is an HO-2 policy enough for my home?

A HO-2 policy can be much more affordable compared to other policies, but it does have more risk. If you're uncertain about how much homeowners insurance you need to protect your home and belongings, it's best to discuss the details with your insurance company.