What does a "HO-3" policy provide?

An HO-3 policy is designed to provide a broad range of coverage features, which is why it includes open perils coverage for the dwelling and named perils coverage for personal property.

Open perils coverage for the dwelling means that the policy covers risks to the home itself from all causes unless they are specifically excluded. This provides homeowners with extensive protection against a wide variety of potential damages, such as fire, theft, vandalism, and certain types of natural disasters.

On the other hand, the named perils coverage for personal property specifies certain risks that are covered for the belongings inside the home. These typically include specific events such as fire, theft, and water damage from burst pipes, but they exclude any perils not explicitly listed in the policy.

This combination of coverage types makes the HO-3 policy one of the most popular choices for homeowners, as it strikes a balance between comprehensive protection for the house and specified coverage for personal belongings.