While an insured's HO-3 home is being constructed (not yet occupied), building materials stored on site are stolen. How does the standard HO-3 typically respond?
a.Theft of building materials before the dwelling is occupied is excluded under the standard form
b.Theft of the materials is covered up to the Coverage B other structures limit, which is normally 10% of the Coverage A amount
c.Theft of the materials is covered up to the full Coverage A dwelling limit shown on the policy declarations page
d.Theft is covered without restriction or deductible
Explanation
The standard HO-3 excludes theft of building materials and supplies before the dwelling is finished and occupied as a residence. A builder's risk policy (or a dwelling under construction endorsement) is the proper coverage during the construction phase. After the insured moves in, the theft exclusion no longer applies and ordinary HO-3 theft coverage begins.
Law Reference: ISO Homeowners — Theft of building materialsThis topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
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