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Sherrie has a standard HO-3 policy with a dwelling limit of $150,000. How much coverage is available for her damaged fence?

  1. $150,000

  2. $15,000

  3. $7,500

  4. $0

The correct answer is: $0

In the case of a standard HO-3 homeowners insurance policy, coverage is typically extended to the dwelling and personal property, but certain items, like fences, may not receive coverage under the dwelling limit unless they are specifically included. The coverage for fences falls under the "other structures" provision, which is usually a percentage of the dwelling coverage limit. In this specific scenario, the dwelling limit is set at $150,000. For an HO-3 policy, other structures, such as fences, are generally insured for about 10% of the dwelling limit, amounting to $15,000. However, it's essential to note that certain exclusions apply, and depending on the circumstances, coverage for the damaged fence may be limited or entirely omitted if specific conditions are not met. The conclusion that there would be zero coverage for the damaged fence could arise from various considerations. For example, if the damage to the fence resulted from a peril not covered under the policy, or if the fence was categorized as an excluded structure under the terms of the policy, she would not receive any payout for the damages incurred. Therefore, the answer indicates a scenario in which Sherrie has no financial recovery for her damaged fence due to the prevailing conditions of her policy or the