What Perils Are Covered by HO-2 and HO-3 Policies?

Homeowners insurance protects against unexpected losses to property, known as “perils” (e.g., fire, theft, windstorm). Understanding the specific perils covered by a policy is important, as different insurance forms offer varying levels of protection. The perils included determine financial recovery after an incident, impacting a homeowner’s ability to repair or replace damaged property.

Understanding Insurance Perils

Insurance policies categorize coverage based on how perils are defined, influencing the extent of financial protection. “Named perils” coverage explicitly lists the specific risks covered. If a loss occurs from an unlisted cause, the policy will not cover the damage. The policyholder must demonstrate the damage resulted directly from a listed peril to receive compensation.

Conversely, “open perils” coverage, also called “all-risk,” covers all risks of direct physical loss unless explicitly excluded. If a peril is not listed among the exclusions, it is generally considered covered. With open perils, the insurer must demonstrate the loss was caused by an excluded peril for coverage to be denied, shifting the responsibility away from the policyholder.

HO-2 Covered Perils

An HO-2 homeowners insurance policy, or Broad Form policy, provides coverage based on the “named perils” principle. For a loss to be covered, it must be directly caused by one of the specific risks listed in the policy. Both the dwelling structure and personal belongings are subject to this named perils coverage. If a peril is not explicitly listed, any resulting damage or loss will not be compensated.

An HO-2 policy typically covers 16 specific perils, providing protection against common hazards. These include fire or lightning, windstorm or hail, explosions, and riot or civil commotion.

The policy also covers damage from aircraft, vehicle impact, and smoke. Vandalism, malicious mischief, and theft are included. Falling objects, and the weight of ice, snow, or sleet are covered perils. Accidental discharge or overflow of water or steam from plumbing, heating, air conditioning systems, or household appliances is also included.

Further protections include sudden tearing apart, cracking, burning, or bulging of heating, air conditioning, sprinkler, or water heating appliances. Freezing of plumbing, heating, or sprinkler systems is covered. Sudden accidental damage from artificially generated electrical current and volcanic eruption complete the list of covered perils.

HO-3 Covered Perils

The HO-3 policy, or Special Form policy, is the most common type of homeowners insurance, offering a blend of coverage approaches. It distinguishes coverage between the dwelling and other structures, and personal property. This policy offers broader protection for the physical dwelling.

For the dwelling and other structures, an HO-3 policy provides “open perils” coverage. Any direct physical loss is covered unless specifically excluded. Common exclusions include flood, earthquake, governmental action, homeowner neglect, war, nuclear hazard, wear and tear, inherent vice, and certain types of mold or fungus.

Other exclusions include earth movement, power failure, and animal or insect infestations. Intentional loss by the policyholder and losses from ordinance or law enforcement are also standard. If a peril is not explicitly excluded, dwelling damage from it is generally covered. This broad coverage is a significant advantage, covering unforeseen events.

Personal property within an HO-3 policy is typically covered on a “named perils” basis. This means personal belongings are covered against the same 16 specific perils as an HO-2 policy. The policyholder must demonstrate the loss was caused by one of these risks. This dual approach, with open perils for the dwelling and named perils for personal property, is a key aspect of an HO-3 policy.

Comparing Peril Coverage

The primary distinction between HO-2 and HO-3 policies is the scope of coverage for the dwelling and other structures. An HO-2 policy insures the dwelling only against its 16 named perils. An HO-3 policy offers “open perils” coverage for the dwelling, protecting against all risks unless explicitly excluded. This provides broader protection for the physical home.

For example, an HO-3 policy might cover damage from an accidental vehicle impact or sudden collapse, which an HO-2 would not unless listed. The HO-3’s “open perils” nature shifts the burden of proof; the insurer must prove an exclusion applies to deny a dwelling claim. With an HO-2, the homeowner must demonstrate the loss was due to one of the 16 named perils. This difference impacts the claims process for structural damage.

For personal property, both HO-2 and HO-3 policies generally provide “named perils” coverage. Personal belongings are covered against the same 16 specific perils, such as fire, theft, or vandalism. The scope of protection for items like furniture, electronics, and clothing is largely consistent. The HO-3’s broader open perils coverage for the dwelling makes it a common choice for homeowners seeking extensive structural protection, despite often having a higher premium.