DWELLING INSURANCE Flashcards
What are the two key differences between dwelling policies and homeowners policies?
- ) the dwelling policy provides more limited property coverage than the homeowners policy
- The unendorsed dwelling policy provides property coverage only, while the homeowners policy provides a package of property and liability coverages.
What is a dwelling policy?
The dwelling policy provides protection for individuals and families against loss to their dwelling and personal property.
What are the three separate dwelling policy forms?
The basic form, the broad form, and the special form.
To be covered under a dwelling policy, a dwelling may have up to how many boarders and apartments?
Up to five boarders and four apartments
Does a dwelling need to be occupied by an owner to be eligible for a dwelling policy?
No.
Can a dwelling be eligible for a dwelling policy if it is under construction?
Yes.
Can a mobile home be covered under a dwelling policy?
Yes, but the mobile home must meet certain qualifications, such as it must be permanently located. Mobile homes may only be covered under the basic form.
What stipulations are there for an incidental business or professional occupancy building that is covered under a dwelling policy?
These operations must be conducted by the insured, provide service rather than sales, and involve no more than two people working on the premises at any one time. Example: beauty parlors, photo studios, professional offices
Who does the dwelling policy cover?
The named insured and the insureds spouse as long as the spouse lives in the same household as the insured.
What is the DP-1?
The basic dwelling form
What four coverages does the DP-1 have?
Coverage A - dwelling
Coverage B - other structures
Coverage C - personal property
Coverage D - fair rental value
What is Coverage A?
Dwelling
What is Coverage B?
Other structures
What is Coverage C?
Personal property
What is Coverage D?
Fair rental value
What does Coverage A - dwelling cover?
Covers the dwelling, structures attached to the dwelling, materials and supplies for use in the construction or repair of the dwelling, or other structures at the location, and building or outdoor equipment used to service the premises.
What does Coverage B - other structures cover?
Insured buildings on the premises that are separated from the dwelling by a clear space or connected only by a fence, utility line, or similar connection. The building may not be used for commercial, manufacturing, or farming purposes.
What does Coverage C - personal property cover?
Covers the insureds personal property that is at the described location and is usual to the dwelling occupancy. Personal property belonging to the insureds guests of servants may be covered at the insureds request.
What is not covered under coverage C (personal property)?
- Money, securities, manuscripts, bullion, currency, accounts, deeds, and evidences of debt
- Bank notes, coins, gold other than goldware, letters of credit, medals, personal records, platinum, silver other than silverware, tickets, and stamps
- Books of account, drawings and other paper records, electronic data processing tapes, wires, records, discs, and other software media
- Credit cards and fund transfer cards
- Animals birds and fish
- Aircraft
- Motor vehicles, other than motorized equipment used to maintain the premises
- Boats, other than rowboats and canoes
- Hovercraft and parts
- Water or steam
- Grave markers
- Electronic fund transfer cards or access devices used to deposit, withdraw, or transfer funds
- Script, stored value cards, and smart cars
- Data stored in computers and related equipment
What is covered under Coverage D (fair rental value)?
Coverage D is available if a covered property loss to the dwelling or other structure makes the building inhabitable and the insured cannot collect the rent he would have been able to receive if the loss had not occurred. 20% of the insurance on the dwelling is available for this coverage.
What are the only perils covered automatically under the basic form?
Fire, lightning, and internal explosion.
What is an internal explosion?
An explosion that occurs in a covered building or in a building containing covered personal property. Typical losses covered would include the explosion of a furnace, stove, or hot water heater.
What are extended coverage perils?
Additional perils the insured may opt to include in their coverage with an additional premium.
What are the nine extended coverage perils?
- Riot
- Explosion
- Vehicles
- Smoke
- Hail
- Civil commotion
- Aircraft
- Windstorm
- Volcanic eruption
What is puffback?
The release of soot, smoke, vapor, or fumes from a furnace, boiler, or similar equipment
What does vandalism and malicious mischief (V&MM) not cover?
Damage to glass parts of a building other than glass building blocks, losses by theft or vandalism to a building that has been vacant for more than 60 days.
What are other coverages that the DP-1 (basic form) has?
Other structures, debris removal, property removed, reasonable repairs, improvements, alterations, and additions, fire department service charge, worldwide coverage and rental value.
What is the other structures coverage on the DP-1?
Provides that up to 10% of the Coverage A limit may be used to cover losses to other structures.
How long is property removed covered under the DP-1?
Five days
What is the loss settlement condition?
States that covered property losses are valued at actual cash value but are not to exceed the amount necessary to repair or replace.
What is the our option condition?
Gives the insurer the right to repair or replace damaged property with material or property of like kind and quality within 30 days of receiving the insureds statement of loss
What is the deductible clause?
States that only the amount of loss over the deductible will be paid, up to the limit of liability.
What is the pair or set condition?
States that in the case of a loss to an item that is part of a pair or set, the insurance company is not obligated to pay the value of the entire set.
What is the loss payment condition?
States that the loss will be paid within 30 days after reaching an agreement with the insured.
What is the other insurance clause condition?
States that if a loss is also covered by other insurance, the insurance company will pay only its proportion of the loss.
What is the recovered property condition?
States that if the insured or insurer recovers property on which the insurer has made a loss payment, the other party must be notified. The insurer may have the property returned, in which case the loss payment will be adjusted, or allow the company to have it.
What is the DP-2?
The Broad form is a named peril policy that lists the perils that dwellings, other structures, and personal property are insured against. The broad form usually covers all of the standard and optional perils available on the basic form (fire, lightening, the extended coverage perils, and V&MM). It also adds additional perils
What perils are broadened under the DP-2 that are not available under the DP-1?
- Damage to covered property caused by burglars
- Weight of ice snow or sleet
- Falling objects
- Freezing of plumbing, heating, air-conditioning, or automatic fire protective sprinkler systems and household appliances
- Sudden and accidental tearing apart, cracking, or burning of steam or hot water heating, air-conditioning, or automatic fire protective sprinkler systems and water heaters
- Sudden and accidental damage from artificially generated electrical current
- Accidental discharge of water or steam at the describe location from within the plumbing, heating, air-conditioning or automatic fire protection sprinkler system or household appliance
What two perils have expanded coverage under the DP-2?
The vehicle peril and the smoke peril
What does the expanded vehicles peril coverage under DP-2 cover?
Damage to fences, driveways, and walks when the vehicle is driven by someone who is not a resident of the insured’s household. It also covers damage to other types of property when the vehicle is driven by an insured or resident of the insureds household.
What does the expanded smoke peril coverage under the DP-3 cover?
Includes loss caused by fireplace smoke.
What is the DP-3?
The special form, provides open peril coverage on the dwelling and other structures, insuring against all risks of direct physical loss that are not specifically excluded in the policy.
All three dwelling forms provide what basic policy coverages?
Coverage A - dwelling
Coverage B - other structures
Coverage C - personal property
Coverage D - fair rental value
What is coverage E?
Additional living expense
What dwelling forms include Coverage E?
The DP-2 and the DP-3
What does Coverage E (additional living expense) cover?
Pays for additional living expenses the insured incurs after a covered loss, including reasonable motel, dining, laundry, and transportation expenses.
What other coverages are included in the DP-2 and the DP-3 that are not included in the DP-1?
- Trees, shrubs, and other plants (5% covA)
- Collapse
- Glass of safety glazing material
- Ordinance or Law coverage (10% CovA)
How long is property removed covered under the DP-2 and DP-3?
30 days
How is proportional replacement cost calculated?
Insurance carried divided by insurance required multiplied by the amount of loss.
What is the broad theft coverage endorsement?
Adds coverage for theft of personal property to the dwelling policy. Covers theft, attempted theft and vandalism, and malicious mischief as a result of theft or attempted theft.
What is Coverage L?
Personal liability
What is Coverage M?
Medical payments to others
What does coverage L (personal liability) cover?
Provides coverage for damages that the insured becomes legally obligated to pay because of an occurrence to which the coverage applies that causes bodily injury or property damage. Policy limit is $100,000
What does Coverage M ( medical payments to others) cover?
The insurer will pay all necessary medical expenses incurred within three years of an accident that causes bodily injury. $1000 limit per person
What three other coverages are included under personal liability and medical payments to others?
Claim expenses, first aid to others, and damage to the property of others.
What are other endorsements that may be used with the dwelling policy?
Automatic increase in insurance and dwelling under construction
