What type of coverage does an HO-3 homeowners' insurance policy primarily provide?

An HO-3 homeowners' insurance policy primarily provides open peril coverage for both the dwelling and personal property. This means that the dwelling is protected against all risks of physical loss or damage, except for those specifically excluded in the policy. This comprehensive coverage offers broad protection to the structure of the home itself.

For personal property within the HO-3 policy, the contents are protected on a "named perils" basis, which means they are only covered against specific risks listed in the policy, such as theft, fire, or vandalism. However, when distinguishing between coverage for the dwelling and personal property, it is essential to focus on the dwelling, which is the main highlight of the HO-3 policy's features.

This distinction is crucial for homeowners because it informs them of the extent of their coverage. In knowing that the dwelling is under open peril and personal property under named perils, homeowners can make informed decisions about additional coverage they may need for personal items or consider additional insurance riders for better protection.