4 Things You Need To Know About HO-2 Home Insurance Policies

When you purchase homeowner's insurance, you need to realize that their are different common levels of coverage that are offered. Here is what you need to know about HO2 or level 2 homeowner's insurance policies.

HO-2 Falls Right In The Middle

HO-2 is essentially a middle-of-the-line coverage for your home. It is not as basic as HO-1 or HO-8 insurance, nor is it as comprehensive as other insurance policies, such as HO-3 or HO-5. If you want more than just your basics protected, but don't have money to shell out for a more comprehensive policy, HO-2 is probably the protection level your insurance agent will recommend for you.

HO-2 Covers The 16 Perils

HO-2 covers sixteen different types of perils. This list is same for all insurance companies. Some of the sixteen named perils that are covered include things such as damage from a lighting storm or damage caused by a fire. It also covers things like theft and vandalism.

However, not all perils that your home could face are necessary covered by HO-2 insurance. For example, if you live in a flood zone, you would not be covered. Or if you live somewhere that experiences hurricanes, that type of damage would not be covered by an HO-2 policy. 

HO-2 Covers Replacement Cost Of Your Home

One of the advantages of HO-2 coverage is that it actually covers the replacement cost of your home instead of the actual cash value. Most people prefer having the replacement cost covered instead of the actual cash value. If the value of your home is less than the cost to replace it, having replacement coverage is a bonus. 

This also applies to all of your belongings as well. For example, if someone were to break in and steal all of your electronics, your insurance company would cover the cost for you to purchase everything new. If you have actual cash value coverage instead, you would just be provided with enough money to cover the current value of your electronics, which include depreciation. You would not get enough money to replace everything that was stolen with new items.

HO-2 homeowner's insurance does have some drawbacks; it doesn't cover every possible peril that your home could experience. However, most HO-2 policies offer you replacement cost instead of actual cash value, and are generally pretty affordable policies that over you enough coverage to cover most major events. 

For homeowner's insurance from a company in your area, contact a company such as Wyoming Financial Insurance.