Under HO-3, personal property coverage is on what basis?

Under HO-3, personal property coverage is on what basis?

• A. Open peril
• B. Named peril
• C. Broad form
• D. All risks except flood

Answer: (B)

Under HO-3, personal property coverage is written on a named-perils basis. This means the policy covers personal belongings only for the specific perils listed in the policy. If a loss happens from a peril that isn’t named (or is excluded), it won’t be covered. The dwelling and other structures, in contrast, are covered on an open (special) perils basis, so they are insured against most risks unless a peril is specifically excluded. So the personal property portion isn’t open to all risks; it relies on the named perils listed, which is why named peril is the correct basis. Common named perils for personal property include fire, theft, vandalism, wind, and similar risks, with floods generally requiring separate coverage.

Under HO-3, personal property coverage is written on a named-perils basis. This means the policy covers personal belongings only for the specific perils listed in the policy. If a loss happens from a peril that isn’t named (or is excluded), it won’t be covered. The dwelling and other structures, in contrast, are covered on an open (special) perils basis, so they are insured against most risks unless a peril is specifically excluded. So the personal property portion isn’t open to all risks; it relies on the named perils listed, which is why named peril is the correct basis. Common named perils for personal property include fire, theft, vandalism, wind, and similar risks, with floods generally requiring separate coverage.