South Carolina Personal Lines Practice Exam

HO-2 covers losses from how many perils?

1. All perils

2. Named perils

3. Special perils

4. Undefined perils

The correct answer is: Named perils

HO-2, also known as the Broad Form homeowners policy, is designed to provide coverage for a specific list of named perils. This means that it will cover only those perils that are explicitly mentioned within the policy. The named perils typically include events such as fire, theft, vandalism, and certain types of water damage. The focus on named perils is a key distinguishing feature of HO-2 compared to other policies, such as HO-3, which provides coverage for all perils except those specifically excluded. This makes HO-2 more limited in scope but can often be a cost-effective choice for homeowners who want essential coverage against certain risks without paying for broader protection. Understanding this difference is vital for anyone looking into homeowners insurance, as it influences both premium costs and the extent of coverage provided.