South Carolina Personal Lines Practice Exam

Which peril is insured against in the coverage C of HO-3?

1. Explosion

2. Basic perils, including theft and vandalism

3. Flood damage

4. Personal liability

The correct answer is: Basic perils, including theft and vandalism

Coverage C of the HO-3 homeowners insurance policy provides protection for personal property against a specific list of perils. These perils encapsulate a broad range of risks that could lead to damage or loss of personal belongings within the residence. The inclusion of basic perils, such as theft and vandalism, highlights the policy’s intent to cover common risks that homeowners typically face. This coverage is essential as it not only protects the physical structure but also the personal items that the homeowner who holds the policy may own, making it crucial for financial security. Other options do not align with the nature of Coverage C: explosion is usually covered under different sections of the policy, flood damage is typically excluded or requires separate flood insurance, and personal liability falls under a different component of homeowners insurance entirely.