South Carolina Personal Lines Practice Exam

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Study for the South Carolina Personal Lines Exam. Use flashcards and multiple choice questions, each with hints and explanations. Prepare for your exam today!

Practice this question and more.

What type of peril is the entire policy of a HO-5 form classified as?

Named peril
Basic peril
Open peril
Limited peril

The correct answer is: Open peril

The HO-5 homeowners insurance policy is classified as an "open peril" policy. This means that it provides coverage for all risks of loss or damage to the insured property, except for those specifically excluded in the policy. This is a broader form of coverage compared to "named peril" policies, which only cover risks that are explicitly listed. With an open peril policy, the burden of proof in the event of a loss often lies with the insurer, as they must prove that an excluded peril caused the damage, rather than the policyholder needing to show that the damage was caused by a covered peril. This comprehensive nature of the HO-5 coverage offers homeowners greater peace of mind, as it protects against a wide array of potential risks, enhancing their financial security in the event of unforeseen damages to their property.