How will liability coverage respond if an insured purchases an outboard boat shortly after buying an HO-3 policy?

When an insured purchases an HO-3 policy, it typically includes liability coverage for certain personal property, such as vehicles, that the insured owns. In the context of an outboard boat, liability coverage generally extends to newly acquired property if the insured notifies the insurer within a specified period of time.

In this scenario, the correct answer indicates that the liability coverage is in effect until the next renewal, suggesting that the policy provides temporary protection for the newly acquired outboard boat. This means the insured can use the boat and have liability coverage for it immediately, but it would be essential to inform the insurer and possibly adjust the policy to ensure continued coverage at the next renewal date. This approach helps to provide flexibility for individuals who might acquire new property between policy renewal dates.

The response of "not covered at all" would imply that the policy does not provide any form of liability coverage for newly acquired boats, which is not typically the case with many homeowners' policies. The option stating "immediately covered with no conditions" overlooks the necessity of notifying the insurer for continued coverage beyond the immediate temporary coverage. Lastly, suggesting that coverage begins after a waiting period misrepresents the nature of the coverage that is generally provided upon acquisition of new personal property under such policies