West Virginia Property and Casualty Licensing Practice Exam

What type of policy is HO2 classified as?

1. Basic form

2. Special form

3. Broad form

4. Comprehensive form

The correct answer is: Broad form

The HO2 policy is classified as a broad form policy. This type of homeowners insurance provides coverage for a wide range of perils that can cause damage to a home and its contents. Specifically, the HO2 extends protection against a greater number of risks than a basic form policy, which typically covers only named perils, while it does not offer the extensive coverage provided by a special form policy that covers all risks except for those specifically excluded. Broad form policies like HO2 are advantageous for homeowners because they cover the dwelling itself against named perils, such as fire, theft, and certain types of water damage, while also providing specific coverage for personal property. This classification reflects the inclusion of more risks than what a basic form would entail, making it a popular choice for homeowners who desire a more comprehensive level of protection without advancing to the broader all-risk coverage associated with special form policies.