South Carolina Personal Lines Practice Exam

HO-4 insures personal property for ____ perils.

1. Open

2. Basic

3. Broad

4. Named

The correct answer is: Broad

The HO-4 policy, also known as a Tenants or Renters Insurance policy, covers personal property against named perils. This means that the policy specifically lists the types of risks or dangers that are covered, which is a key characteristic of this kind of insurance form. Named perils can include risks such as fire, theft, vandalism, and certain types of water damage. Since the policy is focused on personal property, it is important for policyholders to understand what specific perils are included in their coverage. Unlike open peril policies, which cover all risks except those specifically excluded, named peril policies only cover the risks that are explicitly mentioned in the policy. In the context of the other options, "open" would imply broader coverage, which does not apply here as the HO-4 has specific exclusions. "Basic" generally refers to a more limited type of coverage than what the HO-4 offers, as basic policies may cover fewer named perils. "Broad" coverage refers to a higher level of protection that includes more risks than typically covered by named perils. Thus, recognizing that the HO-4 specifically protects against those explicitly listed risks helps clarify why the correct choice is centered around named perils.