West Virginia Property and Casualty Licensing Practice Exam

Which form is referred to as the basic homeowners policy?

1. HO1

2. HO2

3. HO3

4. HO4

The correct answer is: HO1

The basic homeowners policy is represented by the HO1 form. This form provides limited coverage primarily for specific named perils, making it ideal for those who need minimal protection and want to keep premium costs low. The HO1 typically covers the dwelling and personal property against perils such as fire, lightning, explosion, and theft, among others, but does not include comprehensive coverage for additional risks. In contrast, other forms like the HO2 and HO3 provide broader coverage options. The HO2 policy, known as the broad form, extends coverage to more named perils, while the HO3 is an open-perils policy for the dwelling, meaning it covers all risks unless specifically excluded. The HO4 form, also called renters insurance, is designed for tenants and primarily protects personal belongings rather than the structure itself. Understanding these distinctions helps clarify why the HO1 is considered the basic homeowners policy.