Question

How is a HO3 similar to an HO5?

1) Both provide open peril coverage on the dwelling
2) Both provide open peril coverage on personal property
3) Both provide broad coverage on the dwelling
4) All of the above

Answer 1

An HO3 and an HO5 insurance policy both provide open peril coverage on the dwelling. However, only an HO5 provides open peril coverage for personal property, making option 1 the correct answer.

Step-by-step explanation:

When comparing Homeowners' Insurance policies, such as an HO3 and an HO5, there are similarities and differences to consider. Both HO3 and HO5 policies typically offer open peril coverage for the dwelling, which means that the insurance covers all risks of loss that are not specifically excluded in the policy. However, an HO3 policy typically provides named perils coverage for personal property, meaning it only covers losses from events listed in the policy.

In contrast, an HO5 policy offers open perils coverage on personal property as well, which is more comprehensive. Therefore, when answering the question of how HO3 is similar to HO5, the correct answer is: 1) Both provide open peril coverage on the dwelling. The other options are not correct because only HO5 provides open peril coverage on personal property, and stating they both provide broad coverage on the dwelling is inaccurate without specifying the type of coverage.