What is an HO-2 Policy?

Homeowner's Policies (HO-2)

Information regarding policies. HO Section 1 consists of four sections. They're called "A through D" and "Additional coverage." Section 1 tells the insured what property is covered and other damages are not covered.

Coverage A refers to the insured's residence premises indicated on the documents. A second home or summer cottage can be called a temporary residence is not protected as it does not appear in the Declarations.

Coverage B refers to other housing structures separated from the home by a clear area. Unattached garage or shed equipment are examples of property protected in this section.

Coverage C refers to the insured's personal property worldwide—the policy details unique restrictions on certain land.

Often the question arises whether an object is a real or personal property. If it's real property, it's covered under Coverage A; if it's unique, it's protected under Coverage C. Under English common law, everything permanently attached to land is real property

The Special Responsibility Limits passage sets maximum dollar sums that can be recovered when the particular property is lost. In some instances, the limits apply only to peril or robbery loss; in other cases, any loss is subject to the defined limits.

Unique responsibility limitations.

These limitations do not expand liability cap Coverage C. The particular threshold for each numbered category below is the cumulative threshold for each loss in that category.

$200 for banknotes, bullion, gold other than gold, silver other than silverware, platinum, coins, and medals.
$1000 on shares, accounts, debt, credit letters, documents, documents, manuscripts, passports, tickets, and stamps.
$1 000 for watercraft, including trailers, machinery, and outboard motors.
$1000 on non-watercraft trucks.
$1000 Gravemarkers.
$1000 for theft of jewelry, watches, furs, semi-precious stones.
$2000 Gun theft loss.
$2500 for theft of silverware, silver-plated glass, gold-plated glass, and pewterware. This includes flatware, hollowware, tea sets, trays, and silver, gold, or pewter trophies.
$2500 for personal property, off-premises used at any time or for any reason.
$250 for personal property, not used at any time, or for any business purpose.

Some property is excluded from coverage, including the following:

Personal property insured elsewhere, such as in a floater.

Animals, birds, fish.

Vehicles and supplies.

The property that is associated with renting an apartment.

Other types of coverages that can be excluded

Recovered debris disposal costs.
Expenses incurred to protect property from further damage can be covered.
Specialty coverage is required to damage trees and shrubs.
Fire department charges will be reimbursed.
The property was removed from the residence because it was endangered and subsequently damaged or from a removal site and then stolen.
Credit card fraud and related fraud are protected.
Limited amounts.
Specific assessments of the form of cooperative buildings can be paid up to a $1000 limit.
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PERILS INSURED AGAINST (HO-2)

Property insurance plans take one of two simple formats: (1) they may define the risks that may result in an insured loss, or (2) they may have comprehensive or open coverage and define the exclusions that apply. Previously, insurers now avoid used word, coverage of 'all risks,' since no insurance policy covers all potential losses.

For the same cause, the word "comprehensive coverage" is now evaded.

Fire or lightning

"Fire" means a hostile fire, not in its proper location. "Lightning" is an intense electricity discharge. Direct losses from lightning are often challenging to prove significantly when only TV sets and other appliances are affected.

Windstorm, hail

HO-2 protects against tornadoes and all other forms of violent wind destruction. The coverage excludes damage to the buildings or contents inside if the building's exterior first does not suffer damage.

Explosions

An explosion is a difficult concept to describe, and legislation does not define the term. Fire or loud noise can follow an explosion. Gas can be contained under pressure. For example, when a combination of these events causes damage when a furnace blows up, HO-2 covers the event's damage.

Riot or commotion

War, civil war, and rebellion are not contained, but fewer hostilities. Possibly courts and insurers would have to handle the question of terrorist attacks.

Aircraft, vehicles

Aircraft damage involves damage caused by a house-missing spacecraft. HO-2 (but not HO-3) removes losses to gates, driveways, and walks from vehicles driven by a house occupant.

Sudden and unintended smoke

This clause may cover smoke damage caused by a smoldering electric blanket, as may damage resulting from defective cooking appliances. If firefighters cause water damage by exposing the smoldering, this would be shielded as the smoldering blanket or stove would be the proximate cause of the loss.

Vandalism or mischief.

If others knowingly and deliberately destroy the homeowner's property, coverage under the HO-2 contract is suspended if the house has been vacated thirty days before the loss. Vacant means the household insured and their belongings are missing. If an insured takes a holiday with plans to return home, the house is "unoccupied" rather than empty, and the policy remains effective.

Theft

Theft is the act of taking property without the owner's permission. Theft usually does not entail fraud losses or unexplained property disappearance. Three fraud coverage exclusions are in the HO, including insured fraud. Additional limitations apply if the theft happens outside the home, whether in a dorm or an apartment.

Glass breakage

Glass breakage is a result, not a failure. That's extensive coverage. Any danger shattering structural glass (part of the building) causes an insured loss.

Objects falling

Before internal damage is covered, the building must suffer external damage. If a tree branch were to fall and crash through the roof, the roof would be covered with damaged contents.

Snow, ice, or sleet weight

Accidental damage from plumbing

Losses to pipes, machinery, sprinklers, or air conditioners are not protected. Only the damages arising from these units are insured. However, damage caused by slow and frequent leaks is excluded, as is damage incurred if the building is empty more than thirty consecutive days before loss.

The sudden destruction of heaters, air conditioners, or sprinklers

The provision covers these units' explosion, but freezing damages are covered separately.

Freezing plumbing

If the building is occupied or if the building is unoccupied, as long as there is a serious attempt to heat it and frozen pipes that burst cause damage, HO-2 offers coverage.

Sudden damage from artificially-generated electricity

Electrical appliances are protected, except for damage to tubes, transistors, and similar sections. There is coverage if a power surge is sent through the electric lines, and a motor burns out. Short-circuit damage can also often be shielded.

Damage from an eruption, lava flow, or volcanic ash will be covered; earthquake damage is excluded.

Mount St. Helen's eruption raised some concerns about HO insurance coverage.

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