Which of the following is an excluded exposure for HO-3 homeowners policies?

The exclusion of earthquake damage in HO-3 homeowners policies is a significant aspect of coverage under this type of policy. HO-3 policies are designed to provide comprehensive coverage for most perils unless specifically excluded. Earthquake damage is categorized as a unique risk that requires separate coverage, typically available through additional endorsements or standalone policies.

In contrast, water damage from burst pipes, windstorm damage, and fire damage from an electrical fault are generally covered under an HO-3 policy. Water damage is seen as a result of sudden and accidental discharge, windstorm damage is considered a covered peril, and electrical faults leading to fire are also typically included. This distinction is important for policyholders to understand as they evaluate their homeowners insurance needs and consider the necessary coverages to protect against specific risks like earthquakes.