What is HO-2?
HO-2, often called the Broad Form homeowners policy, is a named-perils policy that protects a dwelling and personal property only for the perils specifically listed in the contract. It typically offers broader protection than the most basic named-perils forms but is less comprehensive than an open-perils HO-3 policy — for a comparison, see HO-3 Homeowners Insurance (Special Form).
Who needs it
HO-2 can suit owners who want basic, lower-cost protection for an older home or a seasonal property where full open-peril coverage is not required. It may also be chosen by owners who are comfortable accepting some risk in exchange for lower premiums. Condo and co-op owners usually look to a different form of protection; if that applies to you, learn about HO-6 Insurance: A Vital Safety Net for Condo and Co-op Owners.
What it typically covers
HO-2 usually includes coverage sections for:
- Dwelling and other structures against specifically named perils (for example: fire, lightning, windstorm/hail, explosion, smoke, vandalism and theft).
- Personal property for listed perils, often at actual cash value unless replacement-cost coverage is purchased.
- Loss of use (additional living expenses) if your home becomes uninhabitable after a covered loss.
- Personal liability and medical payments to others, subject to policy limits.
Risk scenario: a covered windstorm that damages siding or a fence is often paid under HO-2, but damage from gradual wear or lack of maintenance typically is not.
Common exclusions or limitations
Named-perils policies exclude causes of loss not listed in the policy. Typical exclusions include earth movement (earthquake, landslide), flood, routine wear and tear, insect or rodent damage, and business-related losses. Many HO-2 policies limit or exclude coverage for high-value items unless scheduled separately, and some losses may be paid at actual cash value rather than replacement cost. Underwriting factors like prior claims, construction type, and the home’s condition can also lead to narrower coverage or higher deductibles.
Factors that influence cost
Premiums are influenced by location, the home’s age and construction, the amount of coverage and deductible chosen, claims history, and risk-management features such as smoke detectors, deadbolts, or a monitored alarm. Policy endorsements (for example, adding replacement-cost personal property or scheduling jewelry) raise cost but reduce out-of-pocket risk.
Proof of insurance & compliance
Mortgage lenders generally require proof of homeowners insurance naming the lender as loss payee. Landlords and homeowner associations may also ask for certificates of insurance. If you only need the most basic named-perils protection, see HO-1 (Named-Perils) Homeowners Insurance to understand how different named-perils options compare.
How to get a quote
Compare coverages, limits, deductibles and endorsements among insurers and review policy samples before you buy. If you want to evaluate how HO-2 compares to other options and discuss coverage limits, talk to your agent for personalized guidance on limits, endorsements and any state-specific considerations.
Frequently Asked Questions
What is the main difference between HO-2 and HO-3?
HO-2 is a named-perils policy that covers only listed causes of loss; HO-3 provides open-peril coverage for the dwelling and named-peril coverage for personal property, making HO-3 broader for structure protection.
Will HO-2 cover water damage from a burst pipe?
Sudden and accidental discharge of water is often covered if listed among the named perils, but damage from neglected maintenance or slow leaks is typically excluded. Check your policy language for specifics.
Can I add flood or earthquake coverage to an HO-2?
Flood and earthquake are generally excluded from standard homeowner policies but can be purchased separately through specialized insurers or government programs, depending on availability in your area.
Still have questions? Talk to a local insurance expert.