California Property & Casualty Broker-AgentProperty InsuranceMedium
A client owns a duplex and lives in one unit while renting out the other. They want a policy that covers their personal property in both units, provides liability coverage, and offers broader coverage for the dwelling than a basic dwelling policy. Which policy form would be most appropriate for this client?
- AHO-4 (Contents Broad Form)
- BDP-3 (Special Form Dwelling Policy)
- CHO-3 (Special Form)
- DHO-6 (Unit-Owners Form)
Show answer & explanationAnswer & explanation
Correct answer: C. HO-3 (Special Form)
The HO-3 policy is suitable for owner-occupied dwellings and provides open perils coverage for the dwelling and broad form named perils for personal property. It also includes liability coverage and can accommodate incidental occupancy by tenants, such as in a duplex where the owner resides.
Why the other options are wrong
- A. HO-4 is for renters and only covers personal property, not the dwelling structure.
- B. DP-3 is for non-owner occupied dwellings and does not typically include liability coverage as part of the standard form.
- D. HO-6 is for condominium unit owners and covers their unit's interior and personal property, not a duplex.
HO-3 (Special Form)
A common homeowners insurance policy form that provides open perils coverage for the dwelling and other structures, and broad named perils coverage for personal property. It is designed for owner-occupied dwellings.
- Owner-occupied primary residence.
- Open perils for dwelling, named perils for personal property.
- Includes liability coverage.
Memory trick: HO-3: Owner-occupied, broad protection, like 'Home Over All'.