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HO2 Home Insurance Policy
The HO2 Home Insurance Policy is considered a mid-range home insurance policy. It is better than an extremely basic home insurance policy (the HO1, HO8, and HOA), yet it is not as comprehensive as other home insurance policies ( the HO3, HO5, and HOB). The HO2 policy protects the home and contents for a broad list of common perils that may occur.
The HO2 Home Insurance Policy is a Named Perils Policy
The HO2 insurance policy is a named perils home insurance policy. Named perils policies specifically list the perils for which your home and personal property are covered. If something happens to your home and belongings that is not on the list of covered perils, you do not have coverage under the HO2 home insurance policy.
Perils Insured Against with the HO2 Home Insurance Policy
The 16 perils that your home and belongings are protected for with the HO2 Home Insurance Policy are:
- Fire or Lightning
- Windstorm or Hail
- Riot or Civil Commotion
- Vandalism or Malicious Mischief
- Volcanic Eruption
- Falling Objects
- Weight of Ice, Snow, or Sleet
- Accidental Discharge or Overflow of Water or Stream
- Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging
- Sudden & Accidental Damage from Artificially Generated Electrical Current
HO2 Home Insurance is Typically Replacement Cost
The HO2 home insurance policy is normally written as a Replacement Cost policy rather than an Actual Cash Value policy. Replacement cost coverage is preferred by most homeowners, because it ensures replacement of property and belongings without depreciating the property. If you have or are considering the HO2 policy, make sure you know whether your personal property is insured at replacement cost or actual cash value. Understanding the difference between insuring your home and contents with replacement cost versus actual cash value could mean the difference between your insurance company covering your entire loss versus just a portion of your loss.
Where This Home Insurance Policy May Lack in Coverage
Although the HO2 home insurance policy will protect you from a broad range of perils, there are a few areas where the HO2 policy lacks. The most common are:
- Water Damage - the HO2 policy does have Sudden & Accidental water damage, but it omits any water damage relating to water backup, foundation, or slow leaks. Most of these, however, can be endorsed on the policy for an additional premium.
- Open Perils - this policy covers only the 16 perils listed above. Policies like the HO3 and the HO5 will actually cover the home for open perils, which means the HO3 or HO5 will cover anything unless explicitly omitted. Although the 16 perils cover about 90% of all claims, the broadest and best coverage can't be found with the HO2 home insurance policy.
Similar Home Insurance Policies
The HO2 insurance policy is very similar to one other home insurance policy you may run across: the HOA+ (or the endorsed HOA).
HOA+: The HOA+ is nearly identical to the HO2 insurance policy. It is a named perils policy that only protects the home and belongings from 16 specific perils. The HOA+ is normally a replacement cost policy, just like the HO2.