Under HO-3, Coverage B is typically what percent of Coverage A?

Under HO-3, Coverage B is typically what percent of Coverage A?

• A. 5%
• B. 10%
• C. 15%
• D. 20%

Answer: (B)

In the HO-3 policy, the limit for Coverage B (other structures like a detached garage, shed, or fence) is set as a percentage of the dwelling coverage, Coverage A. The standard figure is 10%. This proportional approach ensures that as you insure the home for a given amount, there's a corresponding amount available to repair or replace other structures on the property. For example, if Coverage A is $300,000, Coverage B would typically be $30,000. A 5% level would usually be too low for detached structures, while 15% or 20% would provide more than the standard amount unless an endorsement changes it.

In the HO-3 policy, the limit for Coverage B (other structures like a detached garage, shed, or fence) is set as a percentage of the dwelling coverage, Coverage A. The standard figure is 10%. This proportional approach ensures that as you insure the home for a given amount, there's a corresponding amount available to repair or replace other structures on the property. For example, if Coverage A is $300,000, Coverage B would typically be $30,000. A 5% level would usually be too low for detached structures, while 15% or 20% would provide more than the standard amount unless an endorsement changes it.