P&CTexaseasy
Under a standard HO-3 policy, how is the dwelling covered compared to an HO-2?
AHO-3 covers the dwelling on a named-perils basis; HO-2 covers the dwelling on an open-perils basis
BBoth HO-2 and HO-3 cover the dwelling on an open-perils basis
CBoth HO-2 and HO-3 cover the dwelling on a named-perils basis
HO-3 covers the dwelling on an open-perils basis; HO-2 covers the dwelling on a named-perils basis
Why this is the answer
The HO-3 (Special Form) insures the dwelling and other structures on an open-perils (all-risk) basis — meaning coverage applies unless a peril is specifically excluded. Personal property under HO-3 remains on a named-perils basis. HO-2 (Broad Form) covers both dwelling and contents on named perils only. Per the TX P&C outline, knowing these distinctions is directly tested on the exam.
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