What type of policy typically covers additional living expenses in the event of a loss?

The correct answer is that the HO-3 policy typically covers additional living expenses in the event of a loss. This policy is a standard homeowners insurance form that provides broad coverage for the residence and additional living expenses.

When a covered peril damages the home, and the policyholder is unable to live there as a result, the HO-3 policy will provide reimbursement for necessary increased living expenses incurred while the home is being repaired. This can include costs for temporary housing, meals, and other essential expenses that exceed the usual living costs.

The other types of policies—HO-4, HO-5, and HO-6—serve different purposes. The HO-4 policy is a renters insurance policy that typically does not cover the structure itself since it is intended for tenants. The HO-5 policy offers expanded coverage for personal property but is not typically referred to in relation to living expenses like an HO-3. The HO-6 is designed for condominium owners and primarily focuses on the personal property and certain structural elements inside the unit, but it does not function like the HO-3 in terms of providing additional living expenses resulting from a loss. Therefore, the HO-3 is the most appropriate form for covering additional living expenses in case of a loss.