Chapter 5

Question 1

The Dwelling Program offers insurance for _______________ otherwise ineligible for a
Homeowners policy due to age, value, or location

Answer 1

residential dwellings

Question 2

Eligible dwellings may have up to ___ dwelling
units.

Answer 2

4

Question 3

Dwellings are limited to having no more than ___ roomers or boarders in order to maintain
eligibility.

Answer 3

5

Question 4

________________ occupancies that make use of the dwelling, like an office space or a
studio for music lessons, are allowed.

Answer 4

Incidental business

Question 5

_______________ with permanent foundations are eligible for the
Basic Form.

Answer 5

Mobile homes

Question 6

_____________ are never eligible.

Answer 6

Farm dwellings (OLD MCDONALD HAD A FARM EE I EE I NO)

Question 7

Coverage
____ insures the dwelling and attached structures.

Answer 7

Coverage
A

Question 8

Coverage _____ covers other structures separated from
the dwelling by a clear space.

Answer 8

Coverage B

Question 9

Coverage ___ covers personal property.

Answer 9

Coverage C

Question 10

Certain items are excluded from
contents coverage, including currency, animals, aircraft, vehicles, computers, credit cards, and
property of a tenant or boarder.

Question 11

Coverage ___ pays for the fair rental value of the part of the dwelling
that was or could have been rented to someone but cannot be due to a covered direct loss.

Answer 11

Coverage D

Question 12

Coverage
____ pays for the increase in living expenses that result from a covered loss.

Answer 12

Coverage
E

Question 13

Coverage for additional
living expenses is not available for the _____________.

Answer 13

Basic Form

Question 14

The _________________ automatically insures against the named perils of fire, lightning, and internal
explosion.

Answer 14

DP–1 (Basic Form)

Question 15

Extended Coverages (EC) and vandalism and malicious mischief (VMM) coverage are available for
additional costs.

Question 16

EC perils include: _____________________________________________________. This coverage applies to Coverages A, B, and C, and all losses are paid on an
actual cash value basis.

Answer 16

windstorm and hail, aircraft, riot, vehicles, volcanic eruption,
explosion, and smoke (Think WHARVES)

Question 17

The ________ (Broad Form) insures against named perils that include the Basic Form’s base perils,
EC and VMM perils, and certain other perils. These other perils include: property damage by
burglars, falling objects, the weight of snow, accidental overflow of water from certain systems
or appliances, accidental cracking of those systems and appliances, and accidental damage from
electrical currents. Losses under Coverages A and B are settled on a replacement cost basis. Losses
under Coverage C are settled on an actual cash value basis.

Answer 17

DP–2

Question 18

The _______ (Basic Form) automatically insures against the named perils of fire, lightning, and internal
explosion. This coverage applies to Coverages A, B, and C, and all losses are paid on an
actual cash value basis.

Answer 18

DP–1

Question 19

The _____ is the Special Form. It provides coverage on an open perils basis, which includes all of the
Broad Form’s covered perils and any other peril that is not specifically excluded. Exclusions include:
wind damage to outdoor TV antennas, deterioration, smog and rust, pollutants, smoke from
agricultural smudging or industrial operations, and cracking of foundations. Losses under Coverage
A and B are settled on a replacement cost basis. Losses under Coverage C are settled on an actual
cash value basis.

Answer 19

DP–3

Question 20

The ____________________ condition qualifies replacement cost coverage for the Broad and Special forms.
In order for the insurer to pay the replacement cost, the Coverage A limit must be maintained
to value—at least 80% of the full replacement cost of the building immediately before the loss.
Typically, these policies will only pay actual cash value until actual repair or replacement is
complete.

Answer 20

Loss Settlement

Question 21

Certain coverages are provided without an additional cost, known as _____________________. All
three forms cover the costs of debris removal, reasonable repairs to protect property, and fire
department services charges.

Answer 21

Other Coverages

Question 22

Worldwide coverage for personal property is provided for up to ___
of the Coverage C limit.

Answer 22

10%

Question 23

Under the Broad and Special
forms, coverage for removed property is provided for ________.

Answer 23

30 days

Question 24

The ____________ and ___________ forms have
more Other Coverages to provide some coverage for losses to trees and other plants, losses caused
by collapse or the breakage of glass or safety glazing material, and some of the increased costs from
ordinances or laws regulating the construction or demolition of the building.

Answer 24

Broad & Special

Question 25

All three forms have common exclusions. The ___________________________ will not pay for losses caused by any law regulating the construction or demolition of property (unless the Other Coverage applies) or any response to pollutants. The _____________________ will not pay for losses caused by earthquake, landslide, mudflow, mudslide, or sinkhole. The ___________________ will not pay for losses caused by flood, water below ground that puts pressure on foundations, or water and waterborne material escaping from a levee. This exclusion also removes coverage for losses caused by sewer backup, drain backup, or sump pump overflow. The _____________________ excludes coverage if an off-premises utility service fails and causes a loss. Other exclusions include ______, ________________, and ________________.

Answer 25

Ordinance or Law exclusion Earth Movement exclusion Water exclusion Power Failure exclusion war nuclear hazards intentional losses