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HO-2 broad form vs HO-3: what changes in a claim

The HO-2 insures the house against 16 named perils; the HO-3 against anything not excluded. Where the gap shows up, who must prove what, and lender limits.

4HomeownersInsurance · Published October 10, 2026

The HO-2, ISO's "Broad Form" (HO 00 02), insures your house, other structures and belongings against 16 named perils. The HO-3 insures the house and other structures against any direct physical loss the policy does not exclude, and keeps named perils only for belongings. The difference shows up in unusual or accidental losses and in who has to prove what: under a named-perils form you generally show that a listed peril caused the loss, and under open perils the insurer has to point to an exclusion.

The 16 named perils

On the HO-2, the same list governs the house, other structures and belongings. FC&S, the industry coverage reference, describes the form as the ten base named perils plus six more (FC&S). The sixteen are:

  1. Fire or lightning
  2. Windstorm or hail
  3. Explosion
  4. Riot or civil commotion
  5. Aircraft
  6. Vehicles
  7. Smoke
  8. Vandalism or malicious mischief
  9. Theft
  10. Falling objects
  11. Weight of ice, snow or sleet
  12. Accidental discharge or overflow of water or steam
  13. Sudden and accidental tearing apart, cracking, burning or bulging of a heating, air conditioning or sprinkler system or a water heater
  14. Freezing of a plumbing, heating, air conditioning or sprinkler system or household appliance
  15. Sudden and accidental damage from artificially generated electrical current
  16. Volcanic eruption

The same sixteen appear as the Coverage C perils in the Maine Bureau of Insurance's copy of the HO-3, where the wording of each peril carries conditions. Windstorm does not cover rain damage inside unless wind or hail first opens the roof or a wall. Falling objects does not cover the inside of a building unless the roof or an outside wall is damaged first. Accidental discharge excludes a sump or sump pump and the appliance that leaked. Freezing requires reasonable care to heat the building or drain the system. The electrical current peril excludes circuitry and electronic components.

Side by side

HO-2 HO-3
House and other structures 16 named perils Open perils, minus exclusions
Belongings 16 named perils 16 named perils
Who must prove what Policyholder shows a listed peril caused the loss Insurer shows an exclusion applies
Buildings paid at Replacement cost if insured to 80% or more Same
Belongings paid at Actual cash value unless endorsed Same
Average premium, 2023 data $1,572 $1,737

The settlement rows follow the standard ISO pattern; confirm them in your own form. The premiums come from the NAIC's report on 2023 data, published in July 2026 (NAIC). They describe different mixes of homes, not what one house would cost on each form. About 4.5 million house-years were written on the HO-2 that year, roughly 6.4% of owner-occupied exposures, against 79.5% for the HO-3 (our calculation from the NAIC table).

Six losses compared

Most large losses come out the same, because the 16 perils capture the common catastrophic causes. These are hypothetical outcomes on the standard ISO wording, before the deductible.

Event HO-2 HO-3
A kitchen fire Covered Covered
A storm drops a tree on the roof Covered (windstorm, falling objects) Covered
A supply line bursts and floods the kitchen Covered (accidental discharge) Covered
Sewage backs up through a basement drain Excluded Excluded
Movers drop an appliance and gouge the hardwood floor No named peril Generally covered, since it is direct physical damage that nothing excludes; the insurer may pursue the movers
A painter spills a can of paint across a finished floor No named peril Generally covered, again subject to the deductible

The pattern is that the HO-2 leaves out accidents and causes nobody listed. Both forms exclude wear and tear, earth movement, flood, neglect and similar losses; see what homeowners insurance doesn't cover and anti-concurrent causation clauses explained.

The burden of proof

FC&S states the practical consequence: with named perils "the burden of proof is on an insured to prove a loss is covered," while with open perils "it is up to an insurer to prove a loss is excluded." That is the usual pattern, but burden-of-proof rules vary by state, and some claims turn on several causes at once. When a loss has an unclear cause, such as water stains with no visible source, an open-perils form is easier to collect under. named perils vs open perils coverage goes through the mechanics.

Why anyone buys an HO-2

The lender problem

A mortgage lender may not accept a named-perils form on the house. Fannie Mae's Selling Guide says a one- to four-unit property's policy "should be written on a 'Special' coverage form or equivalent" and lists minimum perils: fire or lightning, explosion, windstorm including named storms, hail, smoke, aircraft, vehicles, and riot or civil commotion (B7-3-02, version dated August 5, 2026, as published in October 2026). An HO-2 names those perils, but the "special form or equivalent" wording means your servicer may ask for more. Confirm with your lender before you accept or keep an HO-2; Fannie Mae and Freddie Mac homeowners insurance requirements covers the agency rules.

If you hold an HO-2 now

  1. Find the form on the declarations page. Many owners learn they have a named-perils policy only at claim time.
  2. Ask the insurer in writing what it would take to move you to an HO-3: an inspection, a roof or wiring repair, a claims-free period.
  3. Request an HO-3 quote at the same dwelling limit and deductible, and get at least two quotes from other insurers; how to compare homeowners insurance quotes shows how to compare like with like.
  4. Check the dollar gap against the exposure. If the premium difference is modest, the HO-3's open perils are almost always better value.
  5. If you cannot move, ask which endorsements are available and what the form excludes.

Key takeaways

  • The HO-2 insures house, other structures and belongings against 16 listed perils; the HO-3 insures the house against everything not excluded.
  • Big losses such as fire, wind, theft and sudden plumbing leaks are covered by both forms; the gap is in accidents and unlisted causes.
  • Under named perils the policyholder generally carries the burden of showing a listed peril; under open perils the insurer must point to an exclusion.
  • NAIC data show the HO-2 averaging less than the HO-3, but the averages describe different homes.
  • Check lender requirements before choosing a named-perils form, and compare an HO-3 quote at the same limits and deductible.

Terms used in this guide

HO-2 (broad form) A named-perils homeowners policy covering 16 listed causes of loss for the house and belongings: broader than the basic form, narrower than the special form. HO-3 (special form) The most common homeowners policy: open-perils coverage for the house and other structures, and named-perils coverage for belongings. Named perils Coverage that applies only to the causes of loss listed in the policy, so a claim is paid only if the damage came from one of them. Open perils Coverage that applies to any direct physical loss unless the policy specifically excludes the cause, so the insurer must point to an exclusion to deny a claim. Peril A specific cause of loss, such as fire, wind, theft or water, that a policy covers or excludes; it is the cause of the damage rather than the damage itself. Exclusion A policy provision that removes coverage for a stated cause, type of loss, property or circumstance that the coverage would otherwise reach.

Related tools

Which homeowners policy form fits your home? Answer a few questions about who owns the home, what kind it is and how it is used, and see which standard policy form usually fits and why.

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