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SC Property & Casualty Exam Course > Dwelling Policy > Flashcards

Dwelling Policy Flashcards

1
Q

The Dwelling Program does not accept dwellings on _______ as these can be insured on a different property policy.

A

Farm Properties

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2
Q

used principally for residential dwelling purposes and cannot have more than 4 dwelling units or more than five roomers or boarders. Mobile homes are eligible if they are permanently affixed to a foundation, but only on the Basic Form of coverage

A

Dwelling Program Eligibility

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3
Q

Dwelling Coverage Forms:

What perils are insured in the DP-1(basic form)?

A

Fire, lightning, internal explosion

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4
Q

For additional premiums, DP-1 can also cover:

A 
Extended Coverage (EC)
Wind storm or hail
Explosion
Riot or civil commotion
Aircraft, vehicles
Smoke
Volcanic eruption
vandalism
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5
Q

Losses to the dwelling, other structures, and contents are paid on an _____________

A

actual cash value basis

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6
Q

What is VMM?

A

Vandalism or malicious mischief (coverage is added to DP-1 with extra premium)

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7
Q

A DP-2(Broad Form) includes:

A

perils insured in DP-1, EC, VM and: damage by burglars, falling objects, weight of ice, accidental discharge or overflow of water, sudden/accidental tearing, freezing, sudden damage from artificial electric current

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8
Q

this does not include theft coverage nor does it apply if the dwelling was vacant 60 or more consecutive days immediately before a loss

A

Damage by burglars

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9
Q

Damage to the exterior of the building must take place for coverage to apply to contents inside the building.

A

falling objects

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10
Q

this doesn’t apply to awnings, patios, pavements, pools, etc.

A

Weight of ice, snow, or sleet

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11
Q

Must occur from within a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, or household appliance. This doesn’t apply to constant or repeated seepage or leakage over a period of time or if the dwelling was vacant 60 or more consecutive days

A

Accidental discharge or overflow of water or steam

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12
Q

Must occur to a steam or hot water heating system, air conditioning system, or automatic fire protective system, or household appliance.

A

Sudden and accidental tearing apart, cracking, burning, or bulging

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13
Q

Must occur to a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, or household appliance. Applies only if the insured used reasonable care to maintain heat in the building OR shut off the water supply and drained all systems of water

A

Freezing

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14
Q

This peril is caused by man-made electricity or power surge and does NOT apply to damage to tubes, transistors, electronic components, or circuitry contained in appliances, fixtures, computers, etc.

A

Sudden and accidental damage from artificially generated electrical current

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15
Q

DP-3 (special form)

A

Coverage for the dwelling and other structures is provided on an open perils basis, meaning coverage is provided for all causes of loss except for those perils specifically excluded.

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16
Q

Losses to the dwelling and other structures are paid on a _______, and losses to personal property are paid on an —————

A

replacement cost basis; actual cash value basis

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17
Q

Name Some excluded losses under coverages A and B:

A
  • collapse,
  • Freezing, thawing, or weight of water or ice on patios, fences, swimming pools, foundations, piers, docks, retaining walls, etc.
  • Theft of property not part of a covered building or structure
  • Theft in or to a dwelling or structure under construction.
  • Wind, hail, ice, snow, or sleet to outdoor radio and TV antennas and aerials, trees, shrubs, plants, and lawns.
  • Vandalism and malicious mischief, theft or attempted theft, and any ensuing loss if the dwelling has been vacant for more than 60 consecutive days immediately before a loss.
  • Constant or repeated seepage or leakage of water or steam over a period of time from within a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, or household appliance – these systems and appliances do NOT include sumps, sump pumps, mold, fungus, or wet rot unless resulting from accidental discharge or overflow of water or steam and is hidden from view.
  • Any of the following: wear and tear; deterioration; mechanical breakdown; smog, rust, or corrosion; smoke from agricultural smudging or industrial operations; pollution; settling, cracking, bulging, or expansion of foundation, walls, floors, pavement, or patios; and birds, vermin, rodents, insects, or domestic animals. Theft of property that is part of the dwelling or other structures is covered as long as the dwelling or other structures have not been vacant for more than 60 days. Theft of contents is still excluded unless coverage has been added by an endorsement.
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18
Q

Which of the following dwelling program forms covers the building on an open peril basis?

A
DP-4

B
DP-2

C
DP-3

D
DP-1

A

DP-3

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19
Q

Coverage A
?

Coverage B
?

Coverage C
?
Coverage D
?

Coverage E
?

A

Coverage A
Dwelling

Coverage B
Other Structures

Coverage C
Personal Property

Coverage D
Fair Rental Value

Coverage E
Additional Living Expenses

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20
Q

used principally for residential purposes, including structures attached, such as an attached garage, carport, breezeway or deck. Coverage also includes materials and supplies on or next to the described location used to construct, alter, or repair to it or other structures at the described location.

A

Coverage A – Dwelling

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21
Q

The Coverage A limit of insurance appears on the ____ as a ______.

A

declarations; specific limit

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22
Q

coverage pays for the loss of rents due to direct loss to the dwelling from a covered peril. The limit of insurance is up to 20% of the Coverage A limit

A

Coverage D – Fair Rental Value

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23
Q

provides insurance for indirect losses that occur as a result of direct losses to property insured under Coverages A, B, or C that are covered by the policy. automatically included in the DP–2 and DP–3 forms; it’s not included in the DP–1 form.

A

Coverage E – Additional Living Expense

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24
Q

pays the insured’s reasonable expenses for the removal of debris of covered property if the property is damaged by an insured peril. Included in the limit of insurance that applies to the damaged property.

A

Debris Removal

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25
Q

If the insured is a tenant, he or she may use up to 10% of the Coverage C limit of insurance for a covered loss to:

A

Improvements, Alterations, and Additions

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26
Q

insured may use up to 10% of the Coverage C limit of liability for a covered loss to property insured under Coverage C while it’s located anywhere in the world

A

Worldwide Coverage

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27
Q

Included in ________limit of liability, this coverage does NOT apply to ____________

A

Coverage C; rowboats, canoes, or property owned by guests or servants

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28
Q

If covered property is damaged by an insured peril, the policy will pay the reasonable costs incurred by the named insured for necessary measures taken to protect covered property from further damage

A

Reasonable Repairs

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29
Q

is not additional insurance and coverage does not increase the limit of insurance that applies to the covered property.

A

Reasonable Repairs

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30
Q

coverage is provided for direct loss by any peril while removed if ————- from the described location to protect it because it is endangered by a covered peril

A

Property Removed

31
Q

Under the __________coverage is provided for 5 days while removed;

A

DP-1

32
Q

Under the ________ coverage is provided for 30 days while removed.

A

under the DP–2 and DP–3 forms

33
Q

In “property removed” does coverage increase the limit of insurance that applies to property being removed?

A

No it does not

34
Q

Under the DP–2 and DP–3 forms, ADDITIONAL coverage is provided for __________on the described location for loss caused by the following perils: fire or lightning; explosion; riot or civil commotion; aircraft; vehicles not owned by the named insured or by a resident of the described location; vandalism or malicious mischief; and damage caused during a burglary or an attempted burglary. This coverage is not included in the DP–1 form.

A

trees, shrubs, plants or lawns

35
Q

Damage to trees, shrubs, plants, or lawns caused by the following perils are not covered by these common causes:

A

wind; hail; weight of snow, ice or sleet; and loss by theft.

36
Q

The limit of insurance for this coverage is up to —– of the ——— limit, with a maximum of ——- applying to any one tree, shrub, or plant.

A

5%;Coverage A; $500

37
Q

This is additional insurance and the policy deductible does not apply; policy will pay up to —– for the named insured’s liability assumed by contract or agreement for ——-incurred when the fire department is called to save or protect covered property from an insured peril.

A

$500; fire department charges

38
Q

Coverage for Fire Department Service Charges does not apply if the property is located within________

A

the limits of the city, municipality, or protection district furnishing the fire department response.

39
Q

defined as the abrupt falling down or caving in of a building, or any portion of a building, but only if it cannot be occupied for its current intended purpose. If a building, or any portion of a building, is in danger of falling down or caving in — or if it’s standing, it is NOT in a state of ______

A

Collapse

40
Q

Collapse does not include——does not increase —–, and is not provided by the —–

A
  • settling, cracking, shrinking, bulging, or expansion
  • the limit of insurance
  • the DP–1
41
Q

Under the DP–2 and DP–3 forms, coverage is provided for the breakage of _____if it is part of a covered building, storm door, or storm window

A

glass or safety glazing material

42
Q

Coverage is provided for _____ caused by______

A
  • direct loss

- earth movement and the pieces, fragments, or splinters of broken glass from the glass or safety glazing material.

43
Q

No coverage applies if the dwelling was__________

A

vacant for 60 consecutive days immediately before the loss

44
Q

vacancy provision doesn’t apply to losses caused by ______Coverage _____increase the limit of liability and is ——–by the DP–1 form.

A
  • earthquakes
  • doesn’t
  • NOT provided
45
Q

additional coverage for DP-2 and DP-3. It applies to increased costs incurred by the named insured due to the enforcement of any ______that requires or regulates the construction, demolition, remodeling, renovation, or repair of a covered building or structure because of a covered loss

A

ordinance or law

46
Q

Up to___ of the Coverage ___ limit of liability may be used for this coverage

A
  • 10%

- A

47
Q

if the insured is a tenant, up to 10% of the limit of insurance that applies to __________ may be used.

A

improvements, alterations, and additions

48
Q

This is additional insurance, and ____ coverage is provided for any loss in value of a building or structure due to the enforcement of any ordinance or law or costs incurred by ordinances that require pollution clean up, removal, treatment, etc.

A

NO

49
Q

The dwelling forms do not insure for loss caused directly or indirectly by any of the following — regardless of any other cause or event that contributes concurrently or in any sequence to the loss:

A 
Earth Movement
Water Damage
power failure
neglect
war
nuclear hazard
intentional loss
non-concurrent exclusions
50
Q

Earthquake, including land shock waves or tremors before, during or after a volcanic eruption; landslide; mudslide or mudflow; subsidence or sinkhole, earth sinking, rising, or shifting. Coverage is excluded whether the earth movement is caused by human, animal, or natural forces. If a direct loss by fire or explosion ensues from earth movement, it is covered.

A

Earthquake

51
Q

Flood, surface water waves, tidal water, overflow of a body of water, water or waterborne material that backs up through sewers or drains or overflows from a sump or sump pump, water or waterborne material below the surface of the ground — including water that exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool, or other structure (such as basement walls). If a direct loss by fire or explosion results from water damage, it is covered.

A

Water damage

52
Q

When would power failure be covered?

A

If it takes place on the described location

53
Q

failure to use all reasonable means to save and preserve property at and after the time of a loss.

A

neglect

54
Q

In what situation would something involving nuclear hazard be covered?

A

fire resulting from the nuclear hazard is covered

55
Q

if an ensuing loss is otherwise covered by the policy, it will not be excluded: weather decisions; acts or decisions, including the failure to act or decide, of any person, group, organization, or governmental body; faulty, inadequate, or defective planning, zoning, development, surveying, sighting, design, workmanship, repair, construction, renovation, remodeling, grading, compaction, materials used in repair, and maintenance.

A

non-concurrent exclusions

56
Q

What type of power failure is excluded under all of the Dwelling forms?

  • A: Power failure that causes a fire to a neighboring property
  • B: Power failure that occurs on the insured premises
  • C: Power failure that occurs off the insured premises
  • D: Power failure that causes a fire on the described location
A

C: Power failure that occurs off the insured premises

Losses caused by power failure off the insured premises is not covered, but if a covered peril ensues as a result of the power failure, the damage from that ensuing loss is covered.

57
Q

An automatic pro rata increase in the Coverage A and B limits of insurance is applied by the percentage shown on the endorsement. This endorsement is used to help offset inflation and may also be referred to as the Inflation Guard Endorsement.

A

Automatic Increase in Insurance Endorsement (DP 04 11)

58
Q

Automatic Increase in Insurance Endorsement (DP 04 11) may also be referred to as the: _______

A

Inflation Guard Endorsement.

59
Q

The Automatic Increase in Insurance endorsement typically increases Coverages A and B by: ________

A

A percentage designated on the endorsement

60
Q

one of two endorsements must be used if the named insured wishes to have coverage for the peril of theft:

A

Broad Theft Coverage or Limited Theft Coverage

61
Q

_________-may be added to any of the dwelling forms IF the described location is owner occupied

A

Broad Theft Coverage

62
Q

If the dwelling is tenant occupied, the _________endorsement must be used.

A

Limited Theft Coverage

63
Q

Both broad theft and limited theft involve:

A
  • insurance for the perils of theft, attempted theft, and vandalism or malicious mischief that results from theft or attempted theft.
  • No VMM coverage applies if the dwelling was vacant from more than 60 consecutive days immediately before the loss
64
Q

Broad Theft Coverage does not apply to ________

A

the DP-1

65
Q

For the dwelling under construction endorsement, The limit of insurance in place at any time prior to completion is a percentage of ______________

A

a percentage of the Coverage A limit that equals the proportion the actual value bears to the value on the date of completion.

66
Q

Once the construction is completed, the named insured must ___________

A

notify the insurer to obtain consent to occupy the dwelling and to adjust the policy premium.

67
Q

Occupancy of the building under Coverage A, as a dwelling, is permitted for ____ after completion.

A

30 days

68
Q

why would a personal liability supplement be desired for dwelling policies?

A

Because the dwelling forms only provide property coverage, if personal liability coverage is desired, coverage must be secured under another policy or an endorsement

69
Q

The endorsement also provides medical payments, additional coverages for claim expenses, first aid expenses, and damage to the property of others.

A

personal liability supplement

70
Q

Exclusions of personal liability supplement include:

A 
Expected or intended injury
Business
Professional services
War
Communicable disease
Sexual molestation
Corporal punishment
Physical or mental abuse
Controlled substance
71
Q

Loss from vandalism and malicious mischief is excluded in a _______if the dwelling has been vacant for more than 60 consecutive days immediately before a loss. A dwelling vacant for only 30 days would still be covered

A

DP-3

72
Q

Hail is a covered peril under _______ if purchased with the Extended Coverage Endorsement.

A

DP-3, the DP-2, and the DP-1

73
Q

All of the following perils are included under the Dwelling Broad Form, except:

A
Burglary Damage

B
Falling Objects

C
Smoke damage from industrial operations

D
Volcanic Eruption

A

C
Smoke damage from industrial operations:

Smoke damage is a covered peril of the Dwelling Broad Form. However, the description of the peril specifically excludes smoke from agricultural smudging or industrial operations.

74
Q

Which of the following coverages is not provided by the Personal Liability endorsement?

A
Medical payments to others

B
Defense costs

C
First aid expenses

D
Injury caused to a regular resident of the dwelling

A

D
Injury caused to a regular resident of the dwelling

Liability coverage applies to expenses incurred by residence employees, but not the named insured or regular residents of the named insured’s household.

SC Property & Casualty Exam Course (9 decks)

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