HO-2 insurance covers your home’s physical structure, personal property, personal liability, medical payments, and additional living expenses. 

HO-2 policies are specified as peril policies, meaning they protect your assets exclusively from specific damages that are listed in your policy. 

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What Does HO-2 Insurance Cover?

The HO2 policy is more expansive than HO-1 insurance, covering 16 perils in total:

  • Fire or lightning
  • Hail or windstorms
  • Explosions
  • Riots or civil commotion
  • Damage from aircrafts
  • Damage from vehicles
  • Smoke
  • Malicious mischief or vandalism
  • Theft
  • Volcanic eruptions
  • Falling objects
  • Weight of ice, snow, or sleet
  • Accidental discharge of water or steam
  • Sudden and accidental tearing apart, cracking, burning, or bulging of certain household systems
  • Freezing of household systems
  • Sudden and accidental damage from artificially generated electrical current

HO-2 only covers damage caused by one of the events, anything else will not be covered under your policy, and you must pay for repairs out of pocket. 

If you have an HO-2 policy, it could either insure your property’s replacement cost or actual cash value. Replacement costs mean that the insurer will pay for replacing/repairs minus deductible, while ACV means they consider depreciation and may not be enough to replace your property.

HO-2 coverage also includes: 

Liability coverage

A typical homeowners insurance policy will assist if you are found liable for damage to another person’s property or bodily injuries. This does not include any injuries or damage you are responsible for while driving. 

Personal property

This covers your clothing, furniture, TV, artwork, and any other personal property. There are sub-limits for private property on most insurance policies.

Additional living expenses

Sometimes referred to as “loss of use,” if your home is deemed unlivable, you will be covered for the costs for you to live elsewhere, depending on the limits (duration and/or monetary amount) outlined in your policy. 

Medical payments to others

If someone is injured on your property, HO-2 will pay a portion of their medical expenses, up to the coverage limits. 

What Does HO-2 Insurance Not Cover?

While more comprehensive than HO-1, HO-2 policies still exclude common risks you may face. For example, it includes sudden and accidental water discharge and steam but usually omits sewer backup or a slow leak.

HO-2 also lacks coverage for: 

  • Floods 
  • Earthquakes
  • Hurricane
  • Mold (dependant on carrier)
  • Vandalism to vacant dwellings
  • Wear and tear
  • Property damage caused by pets
  • Enforcement of building codes and similar laws
  • Intentional acts
  • Neglect
  • Government acts

Who Is Best Suited for HO-2 Insurance?

HO-2 insurance is not an option for many who are shopping for house insurance. You can’t simply call up an insurance provider and request the policy. These policies are given to those whose insurance providers feel that insuring their home with a higher level policy would be too risky (i.e. significantly older homes). 

The common practice is for insurers to encourage you to purchase an HO-8 insurance policy intended explicitly for older homes. If you are struggling to get a higher-level tier of insurance, contact us to discuss your options. 

Where Can You Get HO-2 Insurance?

Because an HO-2 policy is not typically recommended, there is no specific place for purchase.  

How Much Does HO-2 Insurance Usually Cost?

It is impossible to say how much you will personally be paying because each company uses different formulas. This variable could even change from one moment to another depending on your specific situation and needs.

For example, the risk of natural disasters plays a significant role in determining your home insurance cost. States that border the Atlantic and Gulf coasts are more at risk for damaging hurricanes, which could leave you without shelter during an emergency or disaster.

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What Are the Other Types of Home Insurance Policy Forms?

When shopping for house insurance, there are a variety of policies you should 

HO-1 Policies

HO-1 is the most barebones home insurance policy that providers offer. It includes only dwelling coverage, which protects the physical structure of your home and nothing else. HO-1 does not include liability, personal property, medical payments, or additional living expenses coverage

HO-3 Policies

An HO-3 policy is a coverage plan that covers your home’s construction, personal belongings, and liability in the event of damage or injury. The insurance will typically also cover additional living expenses and protection for other structures on your property.

An HO-3 policy is often referred to as an open perils policy, as it covers homes for all dangers except those explicitly excluded in its declarations page. 

HO-4 Policies

HO-4 insurance, also known as renters insurance, protects your personal property but not your physical building. It can also cover your personal liability and temporary living expenses if your home becomes inhabitable.

HO-5 Policies

HO-5 policies are similar to an HO-3 but provide you with premium coverage for your home. Most HO-5 policies cover both the building itself and its contents like furs, fine art and jewellery. 

HO-6 Policies

Condo insurance, also known as HO-6 coverage, is designed to cover you if anything happens while living in a condo. The amount of protection needed will vary depending on what your HOA covers with their policies and how much you’re willing to pay.

HO-7 Policies

HO-7, commonly known as mobile home insurance, is a homeowner’s policy that offers protection from fire and theft. It provides average coverages like liability or personal property damage, explicitly designed for mobile homes.

HO-8 Policies

HO-8 homeowners insurance is a type of coverage that can provide you with protection if your home doesn’t meet the standards required by most insurers.

Homeowner Insurance FAQ

What’s the Difference Between HO-2 and HO-3 Policies?

HO2 coverage is named perils which means that your home structure will only be covered by the specific perils included in your policy. On the other hand, HO-3 covers everything unless it’s excluded from being insured against, so open perils are a better choice for those who want protection to their homes’ structural safety.

What’s the Difference Between HO-2 and HO-1 Policies?

The HO-1 insurance policy is no longer available in most states. The HO-2 covers everything that the first one does, plus two more: damage from falling objects and water damage from accidental overflow of plumbing; heating, ventilation, and air conditioning (HVAC); and household appliances.

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