State Farm Fire Independent Policy Practice Exam

Under an HO-3 policy, Option AI provides coverage for which of the following?

1. Coverage C

2. Coverage B

3. Coverage A

4. Coverage A and Coverage B

The correct answer is: Coverage A

In the context of an HO-3 policy, Option AI refers to additional living expenses coverage for insured individuals after a covered loss, primarily while their home is being repaired or rebuilt. Coverage A in an HO-3 policy typically encompasses the dwelling itself, including structures attached to the home, and is essential for ensuring that the primary residence is protected. Choosing Coverage A indicates a recognition of this fundamental aspect of homeowners insurance, which protects the policyholder's main asset—their home. While Coverage B addresses detached structures on the property and Coverage C covers personal property within the home, Option AI specifically aligns with the coverage related to the dwelling itself, making it the appropriate choice. Understanding this structure and the roles of various types of coverage is crucial in discerning how a policy responds to claims related to the primary living quarters.