South Carolina Personal Lines Practice Exam

Which of the following forms provide broad coverage against various risks?

1. HO-1 only

2. HO-2 and HO-6

3. HO-3 and HO-4

4. HO-5 and HO-6

The correct answer is: HO-3 and HO-4

The correct answer, C, refers to the HO-3 and HO-4 forms, which offer comprehensive coverage for a range of risks. The HO-3 form, commonly known as a special form homeowners policy, provides open-perils coverage for the dwelling. This means that it covers all risks of loss unless specifically excluded, making it one of the most comprehensive homeowner policies available. Personal property under the HO-3 is covered on a named-perils basis, which means it covers specific risks listed in the policy. On the other hand, the HO-4 form, or renters insurance, is designed for those who rent their living space. While it does not cover the structure itself (as that is the landlord's responsibility), it provides broad coverage for personal property, including various risks similar to those covered under the HO-3 form. This form also includes liability coverage, which helps protect the insured against potential lawsuits. Together, both HO-3 and HO-4 forms encompass a broader array of risks, providing a solid foundation for individuals seeking versatile coverage for their residences and personal belongings.