Under an HO-3 policy, if Coverage A is $250,000, Coverage B is:

Under an HO-3 policy, if Coverage A is $250,000, Coverage B is:

• A. $10,000
• B. None of the above
• C. $20,000
• D. $25,000

Answer: (D)

Under a standard HO-3 policy, Coverage B covers other structures on the residence premises that are detached from the dwelling, and it is set at 10% of Coverage A. So the amount for Coverage B is 10% of the dwelling coverage. If Coverage A is 250,000, Coverage B would be 25,000. This proportional rule explains why the other options don’t fit—the 10% rule yields 25,000, not 10,000 or 20,000, and it isn’t “none of the above.”

Under a standard HO-3 policy, Coverage B covers other structures on the residence premises that are detached from the dwelling, and it is set at 10% of Coverage A. So the amount for Coverage B is 10% of the dwelling coverage. If Coverage A is 250,000, Coverage B would be 25,000. This proportional rule explains why the other options don’t fit—the 10% rule yields 25,000, not 10,000 or 20,000, and it isn’t “none of the above.”