If an insured is required to move due to fire damage, what will the HO-3 policy cover for their additional living expenses?

The correct answer is that the HO-3 policy will cover all additional living expenses up to the Coverage D limit. This coverage is specifically designed to help insured individuals who need to relocate temporarily due to a covered loss, such as fire damage.

Coverage D, also known as Loss of Use, provides financial assistance for necessary increased living expenses incurred while the home is being repaired or rebuilt. This includes costs associated with renting a temporary residence, such as an apartment, as well as other related expenses like increased food costs. The key point is that the total coverage is subject to the limit specified in the policy, ensuring that the insured has the necessary support during their displacement.

Understanding this aspect of Coverage D is crucial for homeowners, as it helps them plan for potential costs associated with living away from home following a major incident affecting their property. This coverage plays a vital role in providing peace of mind and financial security in challenging situations.