Question

An insured works outside the home. The insured's sister lives with him and cares for his 4 children. When his home was severely damaged by fire, they move into an apartment while repairs are being made. The largest apartment available in the area has 2 bedrooms, so the insured's sister stays in a motel while the repairs are made. How much will the HO₃ pay for their additional living expenses?

1) The cost of renting and apartment, but not the cost of the motel room
2) The cost of renting the apartment, and 50% of the cost of the motel
3) Nothing
4) All of the expense up to the Coverage D limit

Answer 1

The HO₃ policy will pay for the cost of renting an apartment, but not the cost of the motel room.

Step-by-step explanation:

The HO₃ policy, which is a type of homeowner's insurance policy, will pay for additional living expenses if the insured's home is damaged by fire and they need to move into a temporary apartment. According to the information provided, the insured's sister stays in a motel while the repairs are being made because the largest available apartment in the area only has 2 bedrooms. In this case, the HO₃ policy will pay for the cost of renting the apartment, but it will not pay for the cost of the motel room. Therefore, the correct answer is 1) The cost of renting an apartment, but not the cost of the motel room.