What Is The Difference Between An HO-2 And HO-3 Homeowner's Policy?

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If you feel confused about your homeowner's insurance coverage, you are not alone. A lot of people have trouble understanding how homeowner's insurance works and what it covers. One good place to start with understanding homeowner's insurance is learning about the two most common types of policies you can buy, which are called HO-2 policies and HO-3 policies, and here is some information to help you understand what these are and the differences between them.

The basics of an HO-2 policy

An HO-2 policy is the most common form of homeowner's policy you can buy, and it generally covers eleven basic types of peril, plus some extra things. The eleven perils include things such as hail damage, fire damage, vandalism, glass damage, and smoke damage. In addition, though, an HO-2 policy provides you with extra coverage, which provides compensation if you experience damage or losses from objects falling on your house, freezing temperatures, and the weight of snow or ice on your roof. This type of policy is very comprehensive and will cover most of the types of peril people who own homes experience. When you have an HO-2 policy, it will state exactly what perils are covered. Any peril not listed on it will not be covered.

The basics of an HO-3 policy

The main difference between an HO-2 policy and an HO-3 policy is the wording. With an HO-3 policy, you are covered for every single peril that could possibly happen except for any perils listed on your policy as excluded from coverage. In other words, unless the peril is listed, you can assume you have coverage for it. Common things listed as not covered on an HO-3 policy include earthquakes, nuclear hazards, and damage caused by war or governmental actions.

Other differences to consider

When you are trying to choose the right policy for your home, you should compare these two options to see which would be better for you. As you compare them, you should look at the costs. It may cost a little more to have an HO-3 policy, but it may protect you more too. Additionally, you should look at the risks you have in the area where you live to ensure that all the potential risks you face are covered with the policy you choose.

If you still have questions about these types of policies and want more information, you can find answers by contacting a homeowner's insurance agent today.