Extended Coverages

Question 1

Windstorm or Hail

Answer 1

• Awnings, signs, and antennas outside the dwelling are not covered
• Damage by rain, snow, sleet, sand, or dust to the interior of a building or to personal property located in the dwelling will be covered only if the wind or hail damages the rood or a wall of the building first
  -No coverage applies to rowboats and canoes
  -No coverage for trees, plants, or lawns.

Question 2

Explosion

Answer 2

The peril of internal explosion is expanded in the extended coverage perils. The explosion does not have to occur inside the dwelling. The same limitations to coverage apply to explosions as in the internal explosion peril.

Question 3

Riot or Civil Commotion

Question 4

Aircraft

Answer 4

Includes self-propelled missiles and spacecraft.

Question 5

Vehicles

Answer 5

Coverage does not apply to damage caused by vehicles owned or operated by an insured or a resident of the location listed in the policy. There is also no coverage for loss or damage to fences, driveways, or walks caused by a vehicle.

Question 6

Smoke

Answer 6

Sudden and accidental damage caused by smoke is covered (including the emission or puffback of smoke, soot, fumes or vapors from a furnace or boiler). Coverage does not include smoke from agricultural smudging, industrial operations, or from a fireplace (friendly fires).

Question 7

Volcanic Eruption

Answer 7

There is no coverage for loss caused by earthquake, land shock waves, or tremors.

Question 8

WHARVES

Answer 8

Windstorm;
Hail;
Aircraft/vehicles;
Riot/civil commotion;
Volcanic eruption;
Explosion;
Smoke.

Question 9

W.C. Shaver

Answer 9

Windstorm;
Civil commotion;
Smoke;
Hail;
Aircraft;
Vehicle and volcano;
Explosion;
Riots.

Question 10

Vandalism or Malicious Mischief (VMM)

Answer 10

-covers loss or damage to property from willful and malicious destruction of the insured property; exceptions are as follows:
- Blass breakage or safety glazing material that is part of the building
-Damage from theft or burglary is covered but not the actual property stolen
-No coverage is insured premises vacant more than 60 days

Question 11

Broad

Answer 11

Refer to Chapter 3 dwelling policies

Question 12

7 additional broad form perils

Answer 12

-Damage by burglars
-Falling Objects
-Weight of ice, snow, or sleet
-Accidental Discharge or overflow of water or steam
- Sudden and Accidental tearing apart, cracking, burning, or bulging
- Freezing
- Sudden and accidental damage from artificially generated electrical current

Question 13

B.B. Bice - Golf

Answer 13

Bursting of heating systems;
Burglary damage;
Breaking of water heaters;
Ice, snow, or sleet weight;
Collapse of building or part of a building;
Electrical damage (artificially generated);
Glass breakage;
Objects falling from outside;
Leakage of water or steam damage;
Freezing of plumbing.

Question 14

Additional Broad coverage

Answer 14

-Lawns, Trees, shrubs, and plants
-Breakage of glass
- Collapse

Question 15

Special

Answer 15

DP-3 is an open peril form
- all perils are insured against except those specifically excluded.

Question 16

Differences between DP-2 and special form DP-3

Answer 16

-Theft of property that is a part of the dwelling or other structure is covered in the special form.
-The coverage for accidental discharge or overflow of water and steam is expanded to cover loss as the result of accidental discharge or overflow from water or steam pipes that occurs off of the insured premises.
-There are no exclusions for antennas, outdoor equipment, fences, or awnings from the peril of falling objects in the special form.
-The special form policy will provide coverage for damage to a roof caused by freezing or thawing of water under roof shingles (an ice dam).

Question 17

DP:Causes of Loss - summary

Answer 17

Refer to chapter 3 dwelling

Question 18

Property Coverages

Answer 18

Refer to section 2 chapter 3 dwelling

Question 19

Coverage A - Dwelling

Answer 19

The dwelling must be used principally for dwelling or residential purposes. The description of coverage is broken into two parts: property covered and property not covered.

Question 20

Coverage A - Property Covered

Answer 20

-Dwelling on the described premises listed in the declarations page and all attached structures;
-Any materials or supplies located on or next to the described premises used to construct, alter, or repair the dwelling or other structures on the premises;
-Building equipment and outdoor equipment located on the premises and used to service the location unless insured elsewhere.

Question 21

Coverage A - Not covered

Answer 21

Land, including land on which the dwelling described in the declarations is located.

Question 22

Coverage B - Other structures

Answer 22

covers other separate structures at the same location, such as detached garages and other outbuildings (e.g., sheds or fences). The policy makes allowances for other structures used for a business within defined parameters.

Question 23

Coverage B - Property covered

Answer 23

-Other structures on the described location that are separated from the dwelling by a clear space, or connected only by a fence, utility line, or similar connection;
-Other structures rented to anyone, other than a tenant of the dwelling, but only when used as a private garage; and
-Structures used in commercial, farming or manufacturing when storing property owned solely by the insured or a tenant of the dwelling. Gaseous or liquid fuel must be stored in a tank that is part of a vehicle or craft stored in the structure.

Question 24

Coverage B - Not covered

Answer 24

-Land including land where the other structures are located;
-Structures rented or held for rental to anyone other than a tenant of the dwelling when not used as a private garage;
-Other structures that are used in business (commercial, manufacturing and farming), whether in whole or in part unless used as noted above;
-Gravemarkers and mausoleums

Question 25

Coverage C - Personal Property

Answer 25

can be purchased to cover personal property usual to a residence. If there is no limit shown and no premium charged, the coverage does not apply even though it may be referenced in the policy. Personal property coverage in the dwelling policy is primarily designed to cover personal property that is located on the described premises. Personal property coverage is defined more by the property that is not covered. Make sure to carefully review the lists of property covered and not covered below.

Question 26

Coverage C - property covered

Answer 26

-Personal property usual to a residence, located on the described location for the insured and resident family members, as well as property of guests or servants (may be covered at the discretion of the insured);
-Model or hobby aircraft (not used or designed to carry people or cargo), including any parts whether or not attached to the aircraft;
-Motor vehicles and other conveyances but only while used to service the premises or designed to assist people with disabilities;
-Rowboats and canoes;
-Blank storage media and prepackaged computer software;
-Property moved to a newly acquired residence for 30 days. The limit shown on the declarations will apply on a proportional basis to each residence. Coverage will not extend beyond the expiration date of the policy.

Question 27

Coverage C - Property not covered

Answer 27

-Coins, currency, securities, bills, accounts, bank notes, deeds, passports, manuscripts and evidences of debt;
-Animals, birds and fish;
Aircraft used or designed for flight, including any parts whether attached or not, other than hobby aircraft noted above;
-Hovercraft and parts;
-Watercraft other than noted above;
-Motor vehicles and other motorized land conveyances, other than noted above. This includes electronic apparatus powered by the vehicle. Also included are parts and accessories to the vehicle and electronic equipment but only while in or upon the vehicle;
-The cost to restore data stored in various mediums;
-Credit cards, debit cards or any device used to deposit, withdraw or transfer funds;
-Water or steam (for example, a broken water pipe significantly increases and insured’s water bill);
-Gravemarkers and mausoleums.

Question 28

Coverage D - Fair Rental Value

Answer 28

applies if property under Coverage A, B, or C becomes damaged or destroyed by a peril covered in the policy. (refer to chapter 3 dwelling)

Question 29

Coverage D key points

Answer 29

-The policy will pay the fair rental value of the described premises but will deduct expenses that discontinue while the premises are unfit for use (such as heat and electricity).
-Coverage continues until repairs are completed, but only for the shortest time required. The insurer will pay only a proportionate share of the total rental amount for each month the rented part of the insured location is unfit for its normal use.
-The expiration of the policy will not end the payment of an existing covered claim.
If a civil authority prohibits use of the insured property because of direct damage to a neighboring property that would have been covered by the insured’s policy (had the damage occurred to the insured property), payment for the loss will be covered for up to 2 weeks.
-Coverage does not apply to any loss or expense associated with the cancellation of a lease.

Question 30

Coverage E - Additional Living Expenses

Answer 30

only is available if broad or special form dwelling coverage is written. It can be added by endorsement to the basic form. It pays for the increase in normal living expenses the insured incurs while the described premises are unfit for normal use. Like fair rental value, this is an indirect coverage, so the policy is triggered only when a direct damage claim (A, B, C) is covered by the policy. These additional expenses include things such as rent for alternative housing. The intent is to allow the family to maintain their normal standard of living.

Question 31

Key points for Coverage E

Answer 31

-Coverage will continue until repairs are completed, but only for the shortest time required;
-The expiration of the policy will not end the payment of an existing covered claim;
-If a civil authority prohibits use of the insured property because of direct damage to a neighboring property that would have been covered by the insured’s policy (had the damage occurred to the insured property), payment for the loss will be covered for up to 2 weeks; and
Coverage does not apply to any loss or expense associated with the cancellation of a lease.

Question 32

Other Coverages

Answer 32

All 3 coverage forms, DP-1, DP-2, and DP-3, include other coverages that are extensions of the major coverages A, B, C, D, and E. These other coverages are included in the premium charge, and are subject to the property deductible unless noted otherwise in the form. All coverage forms include the following 8 other coverages:

Question 33

Other Structures

Answer 33

The insured may elect to apply up to 10% of the dwelling insurance amount (Coverage A) to cover other structures on the insured premises. In the basic form, this is not an additional amount of insurance and will reduce the amount available under Coverage A in case of a concurrent loss. In the broad and special forms, coverage is provided automatically and considered an additional amount of insurance.

Question 34

Debris Removal

Answer 34

This provides coverage for reasonable costs to remove debris after a covered loss. This includes the expense to remove ash or dust caused by volcanic eruption. Coverage is not considered an additional amount of insurance.

Question 35

Improvements, alterations, and additions

Answer 35

If the insured is a tenant, up to 10% of the personal property limit (Coverage C) may be applied to loss or damage to improvements, alterations, or additions acquired by the insured tenant. In the DP-1, this is not considered an additional amount of insurance and will not increase the total amount of insurance payable in case of a loss. In the DP-2 and DP-3, this is an additional amount of insurance and will not reduce the Coverage C limit for the same loss

Question 36

Worldwide Coverage

Answer 36

The insured may elect to apply up to 10% of the personal property limit (Coverage C) to pay for losses to personal property away from the premises while anywhere in the world. Coverage does not apply to rowboats or canoes in any dwelling form. Property of guests and servants is not covered away from the insured premises in the DP-1 form (the broad and special forms allow for guest or servant property coverage). This coverage is not considered an additional amount of insurance.

Question 37

Rental Value and additional living expense

Answer 37

Up to 20% of the Coverage A limit of liability may be used for loss of both fair rental value and additional living expense. The DP-1, basic form, applies this coverage only to fair rental value because additional living expense is not included in the form. The 20% extension of coverage is not additional insurance in the DP-1, but is considered additional insurance in the DP-2 (broad) and DP-3 (special) forms.

Question 38

Reasonable Repairs

Answer 38

Reasonable costs incurred by the insured for repairs necessary to protect property from further damage at the time of a covered loss are also covered. This is not an additional amount of insurance

Question 39

Property Removed

Answer 39

The policy will pay for loss or damage to property removed from the insured premises when threatened by a peril insured against. Perils insured against are converted to open peril coverage during the process of removal. The basic form policy provides coverage for 5 days, while the broad and special forms provide 30 days of coverage.

Question 41

Fire Department Service Charge

Answer 41

Up to $500 will be paid for costs incurred by the insured because of an agreement to pay the fire department if they respond to a fire at the described premises. This coverage is considered an additional amount of insurance, and no deductible applies to this coverage.

Question 42

Broad and special forms

Answer 42

-Lawns, Trees, shrubs, and plants
-Breakage of glass
-Collapse
- Ordinance or Law
Refer to chapter 3 Dwelling for more information on each coverage

Question 43

General Exclusions (found in 3 dwellings forms)

Answer 43

-Ordinance or Law
-Earth movements
- Water Damage
- Power failure
- Neglect
-War
-Nuclear hazard
-Intentional loss
- Governmental action
-Special form (DP 00 03) exclusions

Question 44

Conditions

Answer 44

-Policy period;
-Insurable interest and limit of insurance;
-Concealment or fraud;
-Duties after a loss;
-Loss settlement;
-Pair or sets;
-Appraisal;
-Other insurance;
-Subrogation;
-Suit against the insurer;
-Insurer’s option to repair or replace;
-Loss payment;
-Abandonment;
-Mortgage holders;
-No benefit to bailee;
-Cancellation and nonrenewal;
-Liberalization;
-Assignment;
-Death;
-Nuclear hazard;
-Recovered property;
-Volcanic eruption; and
-Loss payable clause.

Question 45

Policy Period

Answer 45

The policy only applies to losses that occur during the effective dates of the policy.

Question 46

Insurable Interest and Limit of insurance

Answer 46

If more than one person has an insurable interest in the property, the insurer will not be liable for more than the insured’s interest under the policy at the time of loss or for more than the applicable limit of liability.

Question 47

Loss Settlement

Answer 47

Will vary depending on which dwelling policy form is being used
- Personal Property, structures that not buildings, awnings, carpeting, household appliances and outdoor equipment are all covered on an ACV basis

Question 48

Replacement Cost

Answer 48

At lease 80% covered, covered with insurer receiving no more than the limit of insurance
-If less than 80%, policy will pay the greater of the ACV

Question 49

Other insurance and Service agreement

Answer 49

If other fire insurance applies to the same loss, the insurer is liable only for the proportion of the loss that the limit of insurance bears to the total of all insurance.

Question 50

Suit against the insurer

Answer 50

No suit may be brought against the insurer unless the insured has fully complied with all policy conditions and the action is started within 2 years (24 months) of the date of the loss.

Question 51

Insurer’s option to repair or replace

Answer 51

The insurer has the option to repair or replace any part of damaged property with like property by providing written notice to the insured within 30 days from receiving a signed, sworn proof of loss.

Question 52

Loss Payment

Answer 52

Losses will be paid within 60 days of receiving proof of loss and coming to an agreement with the insured as to the amount payable.

Question 53

Cancellation and nonrenewal

Answer 53

10 days’ advance notice is required if the policy is canceled for nonpayment of premium or for any other reason if within the first 60 days of coverage. After 60 days, or if the insurer plans to nonrenew coverage, at least 30 days’ notice of cancellation is required. The insurer can cancel the policy midterm only because of misrepresentation of a material fact or if the risk has changed substantially from when it was first insured.

Question 54

Liberalization

Answer 54

If the insurer makes any change that broadens coverage in the policy edition during the policy period or within 60 days before the effective date, these changes will automatically apply, without needing to be endorsed to the policy. There are restrictions to this condition in the event of general program changes from a form change or amendatory endorsement.

Question 55

Death

Answer 55

In the event of an insured’s death, the legal representatives of the deceased insured will be considered an insured but only with respect to the property covered at the time of death.

Question 56

Nuclear Hazard

Answer 56

is defined as any nuclear reaction, radiation or radioactive contamination however caused. Losses caused by nuclear hazard will not be considered caused by fire, explosion, or smoke. This condition also states that direct or indirect losses are not covered if related to a nuclear hazard unless a fire ensues, in which case the fire damage will be covered.

Question 57

Recovered Property

Answer 57

If any property is recovered in which there has already been a loss payment made, the insured has the option of taking the property and returning the amount paid, or giving the property to the insurance company.

Question 58

Volcanic Eruptions

Answer 58

All volcanic eruptions occurring within 72 hours of the initial eruption will be considered one occurrence. This means there will only be one deductible.

Question 59

Selected Endorsements

Answer 59

Several optional endorsements are available to the insured to further expand the coverage provided. Listed below are the most common optional endorsements used with the dwelling policy.

Question 60

Automatic Increase in insurance

Answer 60

is an endorsement that may be added to a dwelling policy to increase the amount of insurance by an annual percentage to offset the effects of inflation. This endorsement requires additional premium.

Question 61

Broad Theft Coverage

Answer 61

The only theft coverage provided in any dwelling policy forms is theft of property that is a part of the building under the special form.

There are no policy forms that cover theft of personal property. However, broad theft coverage can be added by endorsement if the insured is the owner-occupant of the dwelling.

The endorsement will cover personal property owned by the insured or a resident of the insured’s household caused by theft or attempted theft, or for vandalism or malicious mischief that results from theft or attempted theft. There is no coverage if the premises have been vacant for more than 60 consecutive days prior to the loss.

The broad theft endorsement can provide both on-premises and off-premises coverage. Off-premises coverage can be insured only if on-premises coverage is written. A separate limit of liability will be shown on the declarations page for both coverages.

On-premises coverage insures loss of property that is owned or used by the insured or a resident employee at the premises described in the policy. It also extends to property placed for safekeeping in a bank, trust, or safe-deposit company, a public warehouse, or an occupied dwelling not owned, occupied, or rented by the insured.

Off-premises coverage provides protection for property that is either owned or used by the insured, or owned by a resident-employee (while in a dwelling occupied by an insured or while in the employ of the insured), when it is away from the described premises.

There is no off-premises coverage for property at a newly acquired principal residence. However, the on-premises limit will apply automatically for 30 days, including while the property is in transit to the new location.

Certain types of property are covered only for specific amounts. If the insured requires higher limits for these items, additional coverage may be purchased. The categories of property with these special sub-limits are as follows:

Question 62

Dwelling 914) Policy

Answer 62

$200 for money, bank notes, bullion, gold, silver (excluding goldware and silverware), platinum, coins, and other metals;
$1,500 for securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, passports, tickets, and stamps;
$1,500 for watercraft and their trailers, furnishings, equipment, and outboard motors;
$1,500 for other trailers;
$1,500 for jewelry, watches, furs, and precious and semiprecious stones;
$2,500 for firearms and related equipment; and
$2,500 for silver and silver-plated ware, gold and gold-plated ware, and pewterware, including flatware, hollowware, tea sets, trays, and trophies.

Question 63

Specific exclusions

Answer 63

Animals, birds, or fish;
Credit cards and fund transfer cards;
Aircraft, hovercraft, and their parts (except model or hobby aircraft);
Property while in the mail;
Property held as a sample or for sale;
Property specifically described and insured by any other insurance;
Property of tenants, roomers, and boarders (other than relatives);
Business property of the insured or resident employee;
Property in the custody of a laundry, cleaner, tailor, presser, or dryer, except loss by burglary or robbery;
Property at any other location owned, rented, or occupied by the insured, except if the insured is temporarily residing there;
Motor vehicles (other than motorized vehicles used to service the premises that are not subject to motor vehicle registration, and vehicles designed to assist the handicapped); and
Motor vehicle equipment and accessories, including sound receiving, transmitting or recording devices, while in the vehicle.

Question 64

Dwellings under construction

Answer 64

are eligible for coverage. However, due to the unique nature of these risks, an endorsement is required to modify some of the policy provisions. The limit of liability for a dwelling under construction is provisional, and is based on the completed value of the structure. At the time of loss, the applicable limit is a percentage of the provisional limit, based on the proportion of actual cash value of the property at the time of loss. Premium is based on an average amount of insurance during construction

Question 65

Sinkhole Collapse

Answer 65

The earth movement exclusion found in the dwelling property policy also excludes coverage for earth sinking, otherwise called sinkhole collapse. Sinkhole collapse means the sudden settlement or collapse of the earth supporting the property resulting from an underground hole caused by water on limestone or other rock formations. The sinkhole collapse endorsement will provide coverage for such losses. There is no coverage if the underground hole is manmade.

Question 66

Condominium Unit-Owners

Answer 66

If the insured owns a residential condominium unit, additional coverage may be needed to clearly define the property covered. Alterations, appliances, fixtures and improvements that are part of the building, but which the insured is required to maintain coverage on because of the condominium association agreement, can be insured with this endorsement

Question 67

Water Backup and Sump Pump Overflow

Answer 67

Water that backs up from sewers or which overflows from a sump pump is excluded from coverage under the dwelling policy forms. Coverage for up to $5,000 in loss or damage, subject to a $250 deductible, can be provided for an additional premium with this endorsement.

Question 68

Limited Theft

Answer 68

The limited theft endorsement is designed for a landlord; the definition of insured property is more limited than that of the broad form. Insured property is limited to property owned or used by the named insured, and, if a resident of the same household, the named insured’s spouse. Since the use of the limited theft endorsement is intended for a non-owner occupied residence, there is no extension of coverage for the property of residence employees.

The limited theft endorsement excludes losses caused by tenants, roomers or boarders or members of their families or their employees.

This endorsement has the same exclusions as the broad theft endorsement. In addition, it excludes coverage for the following types of property:

Money, bank notes, bullion, gold, silver (including goldware and silverware), silver plated ware, pewterware, platinum, coins and other metals;
Securities, accounts, deeds, evidence of debt, letters of credit, notes other than bank notes, manuscripts, passports, tickets and stamps;
Jewelry, watches, furs, precious and semiprecious stones; and
Loss caused by a tenant, roomer or boarder, member of the tenants’ household, or their employees.
There are only 3 special limits applicable to certain types of property. The 3 sub-limits found in the limited theft coverage for are the following:

$1,500 for watercraft, including their trailers, furnishing, outboard motors, and equipment;
$1,500 for other trailers; and
$2,500 for firearms and related equipment.