Define Homeowners Insurance Broad Form Policy

Homeowners insurance is available in a variety of prepackaged forms

Broad form homeowners insurance provides comprehensive coverage for the structure of a home, its contents, other structures like garages and sheds, liability losses and medical payments.

Features

Broad form homeowners insurance is distinguished from other forms by the number of perils it covers. A broad form, or HO2, policy covers 18 named perils. Basic, or HO1, policies protect against 11 named perils. Special HO3 form policies cover anything not specifically excluded.

Benefits

A broad form HO2 homeowners policy provides comprehensive coverage and is divided into liability and property coverage. Liability protects against lawsuits and medical costs brought by injured third parties. Property coverage includes the structure, its contents, other structures and coverage for loss of use after a claim.

Covered Perils

Broad form policies cover fire, property removed during fire, windstorm, hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, weight of ice or snow, theft, vandalism, falling objects, glass breakage, collapse of buildings, sudden accidental discharge of steam or water, freezing of plumbing or heating, and sudden accidental electrical discharge.

Structure and Contents Coverage

The structure is covered for the amount it would cost to replace the home in the event of a total loss. Broad form contents coverage is usually for actual cash value.

Broad Versus Special Form

Broad form HO2 policies are less popular than special form HO3 policies, according to the National Association of Insurance Commissioners. For a relatively small increase in premium, HO3 special form policies provide replacement cost coverage for contents and protect the structure against more perils.

References

• This Old House: Home Insurance 101
• NAIC: A Consumers Guide to Home Insurance
• Insurance Risk Management Institute: Homeowners Policy Broad Form 2 (HO2)