Which situation is not covered for liability under an HO3 policy?

• A. Mike using a 4-wheel ATV to haul yard clippings and injuring a neighbor on his property
• B. Mike rents the community center for his son's wedding reception and a guest sues for injuries
• C. Mike owns a 16 foot, 100 HP outboard motor boat and has an at-fault accident destroying another boat; the owner sues Mike
• D. Someone falls at the house Mike is planning to live in after it is built

Answer: (C)

A key idea here is that homeowners liability coverage (HO3) excludes liability arising from the ownership, maintenance, or use of certain watercraft. In particular, watercraft with engines over a certain horsepower aren’t covered unless you have an endorsement or separate boat policy. A 16-foot boat with a 100 HP outboard clearly falls into that excluded category, so a liability claim resulting from an at-fault incident involving that boat wouldn’t be covered under the HO3 policy.

That’s why the scenario with the boat fails to be covered. The other situations involve risks that HO3 liability typically covers: an ATV involved in an on-property incident is a land vehicle use, and personal liability for injuries or property damage caused away from home—like a one-time rental of a community center for a wedding—falls within the usual scope of coverage, with proper policy limits. The situation about someone being injured at a future residence is also within the broad liability scope when the location is the insured residence or a place the insured is allowed to be. The watercraft exception is the specific reason why the boat case is not covered.