Russ and Roberta own a single-family home insured to value under an unendorsed HO-3—Special Form (HO-3) with a limit of $350,000 for the Coverage A—Dwelling with a $500 deductible. They also have a two-car detached garage on the premises with a second floor apartment. The garage apartment is rented to a local college student. Lightning strikes the garage and it burns to the ground. The replacement cost of the garage is $45,000. This loss to the detached garage is

Russ and Roberta own a single-family home insured to value under an unendorsed HO-3—Special Form (HO-3) with a limit of $350,000 for the Coverage A—Dwelling with a $500 deductible. They also have a two-car detached garage on the premises with a second floor apartment. The garage apartment is rented to a local college student. Lightning strikes the garage and it burns to the ground. The replacement cost of the garage is $45,000. This loss to the detached garage is




A. Covered up to the Coverage B limit of $34,500.


B. Covered up to the replacement cost of $44,500.


C. Not covered since a Coverage B exclusion applies.


D. Not covered since lightning is not a covered peril.



Answer: B

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