Arizona Adjuster Practice Exam

Which of the following items would NOT be covered under an HO-3 Special Form homeowners policy?

1. a greenhouse rented to a local farm

2. personal belongings in the home

3. the primary residence

4. outdoor furniture on the property

The correct answer is: a greenhouse rented to a local farm

The correct answer indicates that a greenhouse rented to a local farm would not be covered under an HO-3 Special Form homeowners policy. This type of policy typically covers the primary residence, personal belongings within the home, and other structures on the property, provided those structures are used for residential purposes and are owned by the policyholder. However, a greenhouse that is rented out to a farm represents a scenario where the use of the structure is primarily for commercial purposes rather than residential purposes. Since homeowners insurance is intended to cover primarily residential risks, renting the greenhouse for agricultural use shifts it away from the homeowner's insurance coverage. Therefore, availability of coverage under an HO-3 policy hinges on the residential use of properties owned by the insured. Since the greenhouse is not being used for the insured's personal residential needs but is rather used for generating income as a rental property, it falls outside the coverage scope of an HO-3 policy. This clarification is important when evaluating which assets are eligible for coverage under homeowners insurance policies.