Dwelling Policy (CH 4)

Question 1

Dwelling Policy

Answer 1

a monoline policy providing property protection only to a residential dwelling. There is no liability coverage provided in by the contract.

Can be sold to:

• an owner occupant
• landlord who does not live in the dwelling but rents it out.

Question 2

DP-1

Answer 2

Basic form providing limited protection. Policy covers 11 named perils and loss is indemnified on an ACV basis.

Question 3

DP-2

Answer 3

Broad form providing more coverage than the basic form. Policy lists more covered perils and expands coverage- also provides replacement cost settlement, but ACV on contents.

Question 4

DP-3

Answer 4

Special form that gives the best coverage. Provides all risk coverage for dwelling and detached other structure. Indemnifies loss on a replacement cost basis.

Question 5

Coverage A- Dwelling.

Answer 5

Dwelling and all structures attached to the dwelling such as an attached garage. Also includes building equipment, fixtures and outdoor equipment located on the dwelling premises and used for the service of the dwelling, and building material intended for use in the remodeling of the dwelling.

Question 6

Coverage B- Other Structures

Answer 6

Outbuildings, or unattached structures that are separated from the dwelling by a clear space.
Insured may apply up to 10% of the amount of coverage applicable to the dwelling to outbuildings.

Question 7

Coverage C- Personal Property

Answer 7

Contents coverage. Personal possessions usual and incidental to dwelling occupancy. Includes tools, furniture, clothing, appliances, etc.

contents NOT covered: money, automobiles, animals, birds, fish.

Question 8

Coverage D- Indirect Loss

Answer 8

Also known as Fair Rental Value.
Provides coverage up to 20% of the coverage A limit that can be utilized.

Does not apply unless whatever caused the structure to be uninhabitable (the direct loss) is also covered by the policy.

ex. a fire makes rental uninhabitable for 3 months while being repaired- policy covers lost rental income bc policy covers fire. In the case of an earthquake, lost rental income not covered bc earthquake is an excluded peril from policy.

Question 9

General Perils exclusions

Answer 9

1. Ordinance and law
2. Earth movement (earthquake)
3. Water damage (traditional flooding including sewer backup)
4. Off-premises power failure
5. Neglect
6. War
7. Nuclear
8. Intentional Loss

Question 10

Four of the eight perils exclusions that can be covered by an endorsement

Answer 10

• Ordinance and Law
• Earth Movement
• Sewer backup (not flooding)
• Off-premises power failure