What type of perils does the HO-3 policy cover for coverages A and B?

The HO-3 policy, also known as the special form homeowners insurance policy, provides coverage for the dwelling (Coverage A) and other structures on the property (Coverage B) on an open perils basis. This means that the policy covers all perils except for those specifically excluded in the policy provisions.

Open perils coverage offers broader protection compared to basic or broad perils coverage. While basic perils would only cover specific risks, such as fire, lightning, and theft, and broad perils would cover a wider array of risks but still have defined exclusions, the open perils approach of the HO-3 policy provides extensive coverage, minimizing the risk of uncovered damages to the dwelling and other structures. By clearly stating that coverages A and B are protected against any cause of loss unless otherwise excluded, the HO-3 policy gives homeowners significant peace of mind, making it one of the most popular forms of homeowners insurance.

The choice that was selected emphasizes the comprehensive character of the HO-3 policy, reinforcing how it is designed to protect the insured against a multitude of risks, thereby enhancing understanding of the advantages this type of coverage offers.