New Jersey Property and Casualty Insurance Practice test

Volcanic eruption is included because the HO-3 form covers direct physical loss to the dwelling and other structures on an open-peril basis, with volcanic eruption explicitly listed as a covered peril. In contrast, flood and earthquake are typically excluded under the standard HO-3 and require separate coverage or endorsements to be insured. Tornado is a windstorm peril and is generally covered, but the question’s correct choice highlights volcanic eruption as a standard covered peril on the HO-3 form.