HO2 Homeowners Insurance Policy
HO2 insurance policies, like HO1 policies, provide coverage for property damage to your home, damaged to detached structures, expenses incurred for loss of use of your home while it’s being repaired, personal property contained within your home, and general liability coverage for people injured on your property by accident or your negligence.
HO2 policies are basic, named perils homeowners insurance that expressly enumerate the types of storms and disasters covered. HO2 policies typically protect your home and personal property from the same basic perils listed in an HO1 policy and include several additional perils.
- Fire or Lighting
- Hail storms
- Riots or civil unrest
- Volcanic eruption
- Theft or Vandalism
- Falling objects (trees, parts of the home, etc. – however, you must show that the object fell due to one of the listed perils and not simply due to lack of maintenance or negligence on the homeowner’s part)
- Weight of Ice, Snow, or Sleet
- Accidental discharge, leakage or overflow of water or steam from within a plumbing, heating or air conditioning system or domestic appliance
- Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system or of appliances for heating water
- Sudden and accidental damage from artificially generated currents to electrical appliances, devices, fixtures and wiring
- Sudden & Accidental Damage from Artificially Generated Electrical Current
Additional perils included in an HO2 policy
As with all named perils policies, if a specific peril is not expressly listed in your policy, you will not be covered. For example, damage to your property from a flood is not covered by standard HO2 policies unless you purchase additional flood insurance.
Typically, HO2 insurance policies calculate loss for your home based on replacement cost which means that if your home is destroyed, the insurance company will pay, up to your insured amount, to replace your home with similar quality and materials without any deductions for depreciation. Watch out for policies, or portions of your policy, that use actual cash value calculations.
Most often applied to your personal property within your home, actual cash value only pays you what the items is worth today. If for example the TV you purchased three years ago for $2500 is destroyed, the insurance company will calculate the actual cash value of the TV today. Due to depreciation, a three year old TV will not be valued anywhere near the $2500 it may cost to replace the set.
Please note that while the contents of your home are covered by standard homeowner’s insurance policies, you may need to purchase extra coverage for jewelry, antiques, expensive art, etc. Check your policy or ask your agent if valuables that you keep in your home are adequately covered.