State Farm Fire Independent Policy Practice Exam

For Jennifer Marco's HO-3 policy, what accurately describes her coverage for personal property?

1. A. Coverage applies for perils listed under Section I - Losses Insured and Section I - Additional Coverages.

2. B. Coverage applies only for items she owns, anywhere in the world.

3. C. The limit for theft loss to jewelry and furs is $1000 or 10% of the Coverage B limit, whichever is greater.

4. D. The limit for tornado losses to firearms is $2,500.

The correct answer is: A. Coverage applies for perils listed under Section I - Losses Insured and Section I - Additional Coverages.

The correct answer reflects that the coverage for personal property under Jennifer Marco's HO-3 policy applies specifically to the perils listed in Section I - Losses Insured and Section I - Additional Coverages. In an HO-3 homeowner's insurance policy, personal property is generally covered against named perils, which include various risks such as fire, theft, vandalism, and certain weather-related incidents. This means that personal property is protected specifically for losses from these enumerated perils, which is a key component of how HO-3 policies define coverage for personal belongings. In this context, the other options do not accurately depict the complete coverage scenario for personal property. While it is true that homeowners insurance generally covers personal items owned by the policyholder, the specifics and limitations on coverage might not encompass "anywhere in the world" as suggested in another choice, as some limitations or conditions may apply based on the policy. Moreover, limits for specific types of personal property, such as jewelry or firearms, typically follow a predefined amount stated in the policy rather than having a blanket limit potentially provided in competing choices, which do not align with the standard market definitions and conditions. Therefore, option A gives a comprehensive view of the coverage details relevant to the policy in