An HO-2 policy is a form of homeowners insurance that provides less coverage than a standard homeowners insurance policy. This policy type has been all but phased out of the marketplace.
Updated February 24, 20221 min read
Table of contents
An HO-2 policy, also known as a broad form policy, is homeowners insurance that contains more coverage than the most basic of policy forms but less coverage than a standard HO-3 policy. An HO-2 provides coverage for your home and personal property against 16 named perils listed in the policy form. It also covers loss of use, your personal liability, and medical payments if a guest is injured on your property.
An HO-2 policy is a type of homeowners insurance that provides coverage against 16 perils.
A standard homeowners insurance policy has more comprehensive coverage than an HO-2.
This type of coverage only makes up about 5% of single-family home insurance policies on the market.
The HO-2 policy is a type of homeowners insurance, but this type of home insurance policy is basically obsolete nowadays. It’s a named peril policy, meaning you're only protected against the perils listed on the policy.
Here’s a look at the coverages included in an HO-2 homeowners insurance policy.
|Coverage||What does this coverage do?||Loss valuation|
|Section I - Property Coverages|
|Coverage A - Dwelling||Covers the structure of your home and built-in appliances||Replacement cost|
|Coverage B - Other Structures||Covers detached structures on your property||Replacement cost|
|Coverage C - Personal Property||Covers your personal belongings both inside and outside the home||Actual cash value|
|Coverage D - Loss-of-use||Pays for additional living expenses while your home is being repaired|
|Additional Coverages||Explains all the additional coverages in a standard policy—like debris removal, loss assessment and ordinance or law—and the insured limits of each|
|Section II - Liability Coverages|
|Coverage E - Personal Liability||Pays for legal and medical bills if you're held liable for injury or personal property damage to someone else|
|Coverage F - Medical Payment To Others||If a guest is injured in your home, it pays for their medical bills, regardless of who is at fault|
An HO-2 policy covers your home and personal property from the 16 named perils listed in the policy.
Here’s a look at the 16 named perils that you’re covered against in an HO-2 policy:
Fire or lightning
Windstorm or hail
Riot or civil commotion
Weight of ice, snow, or sleet
Accidental discharge or overflow of water or stream
Sudden and accidental tearing apart, cracking, burning, or bulging of a built-in appliance like a water heater or centralized air conditioner or heating system
Sudden and accidental damage from an artificially generated electrical current
➞ For a more comprehensive breakdown of what’s covered and what’s not, check out our guide on homeowners insurance perils
HO-2 homeowners insurance policies cost $1,131 per year on average, according to 2019 data analyzed by the National Association of Insurance Commissioners. 
In comparison, a standard HO-3 policy — the most popular form of homeowners insurance — costs $1,899 per year on average, according to our analysis of 2022 home insurance rate data across the country.
In general, an HO-2 policy will not cover the following perils:
Ordinance or law
Water damage from flooding, sewer backups, or water that seeps up from the ground
Theft to a dwelling under construction
Vandalism or malicious mischief (if vacant more than 60 days)
Mold, fungus, or wet rot (except if it resulted from an accidental discharge or overflow of water)
Wear and tear
Smog, rust or other corrosion
Smoke from agricultural smudging and industrial operations
Discharge, dispersal, seepage of pollutants
Settling, shrinking, bulging, or expanding of parts of the structure like your foundation or walls
Birds, vermin, rodents, insects
As we mentioned earlier, HO-2 homeowners insurance has been all but phased out of the property insurance marketplace. The most popular form of homeowners insurance is an HO-3 policy. So, what makes an HO-2 different from an HO-3?
Named perils policy, meaning your home and personal property are only covered against the 16 specific perils listed in the policy form.
Onus is on you to prove a named peril damaged your property.
All risks, or open perils, policies — meaning the structure of your home is protected against except the specific perils listed in the policy form.
The burden of proof is on the insurer to demonstrate that a particular peril isn’t covered when you file a claim.
Personal property is protected against named perils.