Question
A homeowner wants a policy that will pay for any loss to their home's contents, but their agent explains their HO-2 policy will only pay if the cause of loss is one specifically listed in the policy. Why does the HO-2 form work this way instead of covering everything not excluded?
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HO-2 is a named-perils form: it lists the specific covered causes of loss (fire, lightning, windstorm, theft, and similar named perils) for both the dwelling and personal property, and a loss must be traced to one of those listed perils to be paid. This differs from an open-perils (all-risk) form, which covers everything except what is specifically excluded, shifting the burden of proof from the insured (who must show a listed peril caused the loss under HO-2) to the insurer (who must show an exclusion applies under an open-perils form). A candidate should recognize HO-2 as the narrower, named-perils option in the HO series.
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