What additional coverage is provided by the HO-3 policy compared to HO-2?

The HO-3 policy offers open perils coverage for the dwelling, which is a key distinction from the HO-2 policy. In an HO-2 policy, the dwelling is covered on a named perils basis, meaning that only specifically listed causes of loss are covered. This can leave homeowners vulnerable to damage from risks not included in those named perils.

In contrast, the open perils coverage of the HO-3 policy means that unless a specific risk is excluded, all risks to the dwelling are covered. This broader scope of protection is beneficial for homeowners, as it provides more comprehensive coverage for potential damage to the property. The open perils approach typically leads to fewer disputes over claims, as the burden of proof is on the insurer to show that a loss is not covered, rather than on the homeowner to prove that a specific cause of loss is included.

This robust coverage is a significant advantage of the HO-3 policy and provides peace of mind for policyholders, setting it apart from the more limited protection found in the HO-2.