Mark has an HO-3 homeowners policy and his luggage worth $2,900 was stolen. Excluding any deductible, which statement is TRUE?

The focus of the assessment is on understanding the coverage limitations of a standard HO-3 homeowners policy, particularly concerning personal property losses. In this scenario, the correct understanding is that an HO-3 policy does provide coverage for personal property losses, including possessions like luggage, but only up to certain limits and under specific circumstances.

Typically, an HO-3 policy offers coverage for personal belongings on a named-perils basis, which means that coverage is provided for losses caused by specific events outlined in the policy. However, it is important to recognize that certain high-value items or categories of personal property may be subject to specific coverage limits. For example, items like jewelry, art, or coins often have lower limits than other personal property.

In this instance, while it may initially seem that Mark could receive coverage for the entire loss, the specific item—luggage—could potentially fall under a category with limitation thresholds, not fully covered under the regular personal property section of the policy. Therefore, an assertion that Mark's policy does not cover personal property losses is misleading, as it suggests complete exclusion rather than potential limitation based on the type of item lost.

In summary, knowing that an HO-3 policy typically does offer personal property coverage (but with limits to certain