review licensing Flashcards
Which of the following is not eligible for the Dwelling Program?
A dwelling located on farm property
Coverage A
Dwelling
including structures attached to the dwelling, such as an attached garage, carport, breezeway, or deck.
Coverage does not apply to land
coverage is replacement value
Coverage B -The limit of liability applicable to other structures is an amount equal to 10% of the Coverage A limit. On the DP–1, this amount is contained within the Coverage A limit. On the DP–2 and DP–3, this is in addition to the Coverage A limit.
Other Structures
dwelling by a clear space. This includes structures connected to the dwelling only by a fence, utility line, or similar connection. Structures eligible under this coverage include buildings, such as tool sheds or detached garages, or nonbuilding structures, such as swimming pools or gazebos.
manufacturing, or farming purposes are also excluded. Exceptions may apply if the structure is used simply to store property used for those purposes that is owned solely by the insured or a tenant of the dwelling.
A shed storing a farming tractor owned by the insured owner-occupant would be covered under Coverage B, unless the shed also contained a filled, external gas can. A shed storing property owned by a commercial business, rather than the insured specifically, would also eliminate coverage for the structure under Coverage B.
Coverage C- Coverage only applies while the insured property is located at the described location, with some exceptions. If personal property is moved from the described location to a newly acquired principal residence, coverage will apply at each residence for up to 30 days or until policy expiration, whichever occurs sooner.
At the insured’s request, Coverage C will cover personal property of a guest or domestic employee while the property is on the described location. However, personal property of a tenant or boarder is not covered, as tenants and boarders will have their own insurance for their personal property.
Personal Property- Property not covered includes:
Accounts, bank notes, bullion, coins, currency, evidences of debt, passports, and securities
Animals, birds, and fish
Aircraft, hovercraft, and watercraft
However, rowboats and canoes are covered
Motor vehicles, other than those used to service the described location or to assist people with disabilities, or those that are not required to be registered. Electrical equipment that is permanently installed in the vehicle is also excluded.
Data, including data stored in books of account, drawings, paper records, or computers and related equipment
Credit cards, funds transfer cards, and other access devices
Water or steam
Grave markers
Coverage D
FAIR rental value
applies when a portion of the described location is rented to others, and it provides insurance for indirect losses that occur as a result of covered direct losses to property insured under Coverages A, B, or C. This part of the policy pays the lost rent of that portion of the described location that is rented or held for rental to others at the time of a loss if the rental unit is unfit for its normal use because of the direct loss.
Payment will be made for the shortest time necessary to repair the damaged portion of the dwelling that is normally held for rental, even if that time extends beyond policy expiration. Expenses resulting from cancelling a lease are not covered. A deduction is made for any continuing expenses, meaning expenses that would continue without regard to whether the unit can be occupied (for example, electric bills or the mortgage payment).
If a civil authority prevents the insured from using the dwelling because a neighboring location was directly damaged by a peril insured against by the insured’s policy, the fair rental value will be paid for no more than 2 weeks.
Coverage E
Additional living expenses-
Coverage E provides insurance for indirect losses that occur as a result of covered direct losses to property insured under Coverages A, B, or C. The policy pays any necessary increases in living expenses incurred by the named insured when a covered loss makes the unit in which the named insured lives uninhabitable. Payment is made only to the extent the insured’s household can maintain its normal standard of living.
Expenses like mortgage and electricity would not be paid because they are continuing expenses, meaning they would exist regardless of if a loss occurred.
Coverage E is automatically included in the DP–2 and DP–3, but it is not included in the DP–1 unless added by endorsement.
All of the following are covered under Coverage B - Other Structures of a Dwelling policy, except:
Construction materials
All of the following are types of property NOT covered under Coverage C - Personal Property of a Dwelling policy, except:
Canoes
DP–1 (Basic Form)
As its name implies, the DP–1 provides basic insurance coverage to insure the dwelling, its contents, and other structures on the premises against three named perils: fire, lightning, and internal explosion. Internal explosion refers to explosions occurring within covered property.
vandalism or malicious mischief (VMM
) for an additional premium. If VMM is added, it excludes loss for vandalism occurring after 60 consecutive days of vacancy. The VMM peril also excludes loss by theft, larceny (theft of personal property), burglary, or pilferage. However, coverage is provided for building damage ca
DP–2 (Broad Form)
named perils, including the basic perils available for the DP–1 (fire, EC, and VMM), as well as the following:
The Dwelling forms define plumbing systems and household appliances as those that do not include a sump, sump pump, or related equipment. They also cannot include a roof drain, gutter, or similar fixture.
Broadened Coverage-The Vehicle peril on the Broad Form is slightly more expansive than that which is provided by the Basic Form. Under the DP–2, the Vehicle peril only excludes loss to a fence, driveway, or walk caused by a vehicle owned or operated by the named insured or a resident.
DP–3 (Special Form)
Coverage for Dwelling and Other Structures (Coverages A and B)
open perils basis, meaning the form insures against all direct physical loss to property and does not cover losses resulting from perils specifically excluded. Excluded perils include:
The exclusions listed in the General Exclusions section of the form
Collapse, except for coverage provided by Other Coverages
Freezing, thawing, or weight of water or ice on patios, fences, swimming pools, foundations, piers, docks, retaining walls, and other structures that support a building
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 trees, shrubs, plants, lawns, and outdoor radio and TV antennas and aerials
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 from within a household appliance
Wear and tear, deterioration, or mechanical breakdown
Smog, rust, corrosion, mold, and wet or dry rot
Pollutants, unless the discharge is caused by a named peril applying to contents coverage
Smoke from agricultural smudging or industrial operations
Settling, cracking, bulging, or expansion of foundation, walls, floors, pavement, or patios
Birds, vermin, rodents, insects, or domestic animals, including infestation by any animal
