South Carolina Personal Lines Practice Exam

What policy provides the most extensive coverage for personal property?

1. HO-2

2. HO-3

3. HO-4

4. HO-5

The correct answer is: HO-5

The policy that provides the most extensive coverage for personal property is the HO-5. This policy is known for offering open perils coverage, which means it protects personal belongings against nearly all types of risks except those specifically excluded in the policy. In contrast, the HO-2 and HO-3 policies provide more limited coverage options. The HO-2, also known as the Broad Form, covers specific named perils, which means coverage is only active for losses caused by perils explicitly listed in the policy. The HO-3 is often more comprehensive for dwelling coverage but still uses named perils for personal property unless otherwise specified. The HO-4, also known as renters insurance, is designed for tenants and can cover personal belongings but does not offer the overall extensive property coverage provided by the HO-5. The HO-5's broader range of coverage gives policyholders peace of mind, knowing that they are protected against a wide array of potential damages and losses to their personal property. Thus, the comprehensive nature of the HO-5 policy makes it the best choice for extensive coverage of personal property.