What type of coverage does HO-2 provide?

HO-2, also known as the Broad Form Homeowners Policy, provides coverage on a named perils basis for both the dwelling and personal property. This means that the policy specifically lists the perils that are covered, as opposed to open peril coverage, which would cover all risks except those explicitly excluded. The named perils typically included in an HO-2 policy often encompass risks such as fire, theft, vandalism, and certain types of water damage.

This type of coverage is particularly suited for homeowners who may have mid-range homes and personal property that is not as valuable or at high risk for a wide array of damages. The named perils approach allows for predictable risk management since the homeowner knows exactly what is and isn't covered under their policy.

In contrast, options suggesting open peril coverage or comprehensive coverage inaccurately reflect the nature of HO-2 policies, as they do not provide coverage for all risks, but rather specify covered perils. Additionally, the mention of modified coverage for older homes does not accurately represent the broader application of HO-2, which applies to a variety of home ages as long as they meet certain condition requirements.