Which form of homeowners insurance is known as the "broad" or "cheap" form?

• A. HO Forms 1
• B. HO Forms 2
• C. HO Forms 3
• D. HO Forms 4

Answer: (B)

The correct answer is associated with the specific coverage provided by homeowners insurance policies. Homeowners insurance policies are categorized into various forms, each offering distinct levels of protection. The "broad" form, also known as HO Forms 2, is designed to cover a wide range of perils for both the dwelling and personal property, providing more comprehensive coverage compared to other forms with limited peril coverage.

The broad form typically includes several named perils like fire, lightning, windstorm, hail, explosion, and theft, which offers homeowners robust protection against a diverse array of risks. This form is often viewed as a balance between comprehensive coverage and affordability, hence the description of it as the "cheap" form when compared to more extensive policies like the "special" form, which is HO Form 3.

In contrast, other forms may either offer limited coverage or focus on particular aspects, such as HO Form 1, which provides limited perils for the dwelling only, or HO Forms 4, which is tailored for renters and does not cover the dwelling. Therefore, the designation of "broad" for HO Forms 2 stems from its enhanced range of protections while remaining economically accessible to homeowners.