Broad Coverage

The first step up from basic coverage is broad coverage house insurance which is sometimes called HO2. The difference between basic and broad coverage is that broad coverage covers quite a bit more than the basic coverage.

A broad coverage policy will generally cover losses from seventeen listed perils, as opposed to eleven listed perils on basic coverage policies. Broad coverage will also provide more general liability coverage. As with basic coverage, most broad coverage policies do not cover losses from certain events, such as floods and earthquakes.

Advantages to Broad Coverage
Broad coverage does provide a homeowner with more protection from loss. It will cover such losses as broken windows, snow and ice damage, damage from fallen tree branches, and damage from broken plumbing. These kinds of damage are usually not covered by basic coverage.

Broad coverage may also cover rental units, home businesses, and activities not covered in basic coverage. In most cases, broad coverage will insure a rental unit but not its contents.

A person should be able to lower the cost of broad coverage by having a higher deductible. Doing so can increase one’s risk, but lower the cost of the policy.

Disadvantages to Broad Coverage

  • It usually costs 5-10% more than basic coverage.
  • Broad coverage policies may not cover certain kinds of possessions such as jewelry, electronics, and coins. Special coverage will be needed for these.
  • Damage from certain kinds of natural disasters, including floods and earthquakes, is often not covered by broad coverage. You will need to get separate special coverage to cover losses from these events.
  • Losses caused by other events not listed in the seventeen perils may not be covered by broad coverage.

When Broad Coverage is a Good Deal
There are times when broad coverage can be a good deal for a property owner. Broad coverage is often ideal for rental property owners because the contents of the structure could be ensured by the tenant.

If there is little or no risk of disasters not mentioned in the seventeen perils, broad coverage is also a good deal for a homeowner. If there is a risk of catastrophes such as floods or earthquakes in your area, basic coverage with separate policies to handle these risks could provide a better deal.

Example: Virginia Property and Casualty Guide

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