Texas All Lines Adjuster Practice Test

What type of coverage does HO Form 5 offer?

1. All-peril coverage for structures only

2. Named-peril coverage for personal property only

3. Comprehensive coverage for both structures and contents

4. Modified coverage with reduced benefits

The correct answer is: Comprehensive coverage for both structures and contents

HO Form 5, also known as the Comprehensive Homeowners Form, offers comprehensive coverage for both structures and contents. This means that it covers a wide range of risks and damages to the home and personal property, without being limited to specific perils. The use of the term "comprehensive" indicates that it provides protection against all risks except those that are explicitly excluded in the policy. This form is typically utilized for newer homes or for homeowners seeking extensive coverage, making it a popular choice. It is important to understand that the comprehensive nature of this coverage includes protection against various types of damage—ranging from fire and theft to certain natural disasters—unless they are specifically excluded in the policy terms. In contrast, other types of homeowners' policies, such as those offering named-peril coverage or reduced benefits, do not provide the same level of coverage or flexibility. Therefore, understanding the scope of coverage offered by HO Form 5 is crucial for homeowners to ensure they are adequately protected against potential losses.