What type of coverage does a HO-3 policy provide?

A HO-3 policy is a standard homeowners insurance policy that offers extensive coverage designed primarily for owner-occupied residences. It provides residential property coverage with an open perils basis for the dwelling, which means the policy covers all risks unless specifically excluded. This type of coverage ensures that the homeowner is protected against a wide range of potential damages to the physical structure of their home.

In addition to covering the dwelling, the HO-3 policy also covers personal property, albeit typically on a named perils basis. This means that the policy will insure personal belongings against loss or damage only if the loss occurs due to specific risks outlined in the policy. Nevertheless, the comprehensive nature of the protection for the dwelling itself, combined with the included personal property coverage, makes the HO-3 policy one of the most commonly purchased homeowners insurance plans.

Other options such as providing only liability coverage, covering natural disasters exclusively, or being specific to rental properties do not accurately capture the broad and versatile nature of the HO-3 policy. Hence, the answer related to the dwelling and personal property with open perils for the structure stands out as the correct choice.