Which statement correctly contrasts HO-3 and HO-5 property coverage?

Which statement correctly contrasts HO-3 and HO-5 property coverage?

• A. HO-3 covers dwelling and personal property on open perils
• B. HO-3 covers dwelling on open perils and personal property on named perils
• C. HO-5 covers dwelling on open perils only
• D. HO-5 covers both dwelling and personal property on open perils

Answer: (D)

Open perils coverage means most risks are covered unless they are specifically excluded. In HO-3, the dwelling and other structures are insured on open perils, but personal property is insured only on named perils. In HO-5, both the dwelling and the personal property are insured on open perils, providing broader coverage for contents as well. So the statement that HO-5 covers both dwelling and personal property on open perils is the best description of the contrast. The other options either misstate HO-3’s treatment of personal property or misstate HO-5’s coverage.

Open perils coverage means most risks are covered unless they are specifically excluded. In HO-3, the dwelling and other structures are insured on open perils, but personal property is insured only on named perils. In HO-5, both the dwelling and the personal property are insured on open perils, providing broader coverage for contents as well. So the statement that HO-5 covers both dwelling and personal property on open perils is the best description of the contrast. The other options either misstate HO-3’s treatment of personal property or misstate HO-5’s coverage.