Idaho Property and Casualty Practice Exam 2025 - Free Practice Questions and Study Guide

An HO-3 policy provides open perils coverage on the dwelling and broad form coverage on personal property. This means that for the structure of the home, the policy covers losses caused by all risks of physical loss, except for those specifically excluded in the policy. This broad protection ensures that the homeowner is safeguarded against a wide range of potential hazards.

In contrast, the personal property covered under an HO-3 policy is insured on a broad form basis, which includes specific perils listed in the policy, such as fire, theft, and vandalism. This distinction is crucial because it means that while the home itself is protected against nearly all threats, the belongings inside may not have as extensive coverage.

This combination approach allows homeowners to appreciate the security of wide-ranging protection for their dwelling while balancing the coverage provided for personal possessions, which is more limited but still comprehensive. Understanding this structure is vital for homeowners in assessing their insurance needs and ensuring that they have adequate protection in place.