What defines an HO-2 policy?

An HO-2 policy, commonly known as the Broad Form Homeowners Insurance, is characterized by its coverage of named perils, which specifies particular risks that are covered under the policy. This means that if a loss occurs, it must be due to one of the explicitly listed perils for the claim to be valid. Named perils typically include risks such as fire, theft, and vandalism.

In contrast, an open perils policy would cover any risks except those specifically excluded, while a standardized policy implies uniform coverage across all scenarios, which doesn't accurately describe the nature of an HO-2. Additionally, while appraisals may be necessary for certain assessments, the requirement of appraisals is not a defining characteristic of the HO-2 policy itself. Thus, the uniqueness of the HO-2 policy lies in its focus on covering a defined list of risks, aligning it with the concept of named perils.