What Is an HO-2 Form?
The HO-2 form is one of six different forms used for homeowners policies. It applies to houses, but not to apartments, condominiums, or cooperatives. Although liability coverage offered through Form HO-2 (Coverages E and F) is similar to the liability coverage that appears in the other five forms, it's the property insurance coverage (specifically Coverage A, B, and C) that makes HO-2 different.
Tip: The form number of your particular policy will usually be shown on the bottom right corner of every page. Use this resource as a learning tool, but always read your policy carefully to familiarize yourself with the details of your coverage.
Dwelling and Other Structures
The HO-2 form provides coverage for 17 named perils:
- Fire or lightning
- Windstorm or hail
- Riot or civil disturbance
- Vandalism or malicious mischief
- Broken glass
- Volcanic eruption
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water
- Sudden and accidental tearing apart
- Artificially generated electrical damage
The coverage provided by Form HO-2 is called "broad named perils" or simply "named perils" coverage. Named perils coverage is more extensive than basic coverage Form HO-1, but less extensive than open perils coverage Form HO-3.
In the HO-2 form, personal property is also covered on a named perils basis. If you're covered under an HO-2 policy, you can collect on your homeowners insurance for damage to your dwelling, other structures, and personal property that is caused by any of the 17 named perils.
If your homeowners policy is written on Form HO-2, you are not covered by property insurance for damage or destruction caused by:
- Enforcement of building codes and similar laws
- Power failures
- Neglect (meaning your failure to take reasonable steps to protect your property)
- Nuclear hazard
- Intentional acts
The impact of these exclusions on your coverage can be easily seen:
Coverage under Form HO-2
Column A You're Covered for Damage Caused By
Column B You're Not Covered for Damage Caused By
Fire or lightning Windstorm or hail Explosion Riot or civil
disturbance Aircraft Vehicles Smoke Vandalism or malicious mischief Theft Broken glass Volcanic eruption
Enforcement of building codes and similar laws Earthquakes Flooding Power failures Neglect War Nuclear hazard Intentional acts Any peril or cause not included in Column A
One of the Conditions in Section I of Form HO-2 describes the amount you will receive for any loss covered by property insurance. Separate amounts are set for Coverages A (Dwelling) and B (Other Structures), and Coverage C (Personal Property), as follows:
- For your dwelling and other buildings, there are two possible scenarios. If your coverage amount is at least 80 percent of the replacement cost of the property, you are entitled to receive the full replacement cost or the amount spent to repair the property. If your coverage amount is less than 80 percent, you will receive only the actual cash value of the property or a percentage of its replacement cost.
- For your personal property (including appliances, carpeting, and structures other than buildings), you are entitled to receive actual cash value of any damaged personal property, but no greater than the repair or replacement cost of the property.
Tip: Loss settlement is always subject to the coverage limits described on the Declarations Page of your policy. This means you are never entitled to receive more than the coverage limit, even in cases where the actual cash value or replacement cost is a greater amount, unless you have increased your coverage limit by endorsement.
Caution: To qualify for payment from your insurance company, you must meet the conditions that are spelled out in your homeowners policy. Some conditions dictate your responsibilities before a loss occurs, and some dictate the actions you must take after loss to remain eligible for coverage. Read your policy carefully to familiarize yourself with your responsibilities under the policy.
One special feature found in Form HO-2 is coverage for your personal property located in an apartment in your home that you rent to others. These items include appliances, furniture, and carpets. Coverage has a limit of $2,500 for any one loss and is on a named perils basis. Of the remaining five policy forms, only Form HO-3 has a similar feature.
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