Unit 6 Dwelling Insurance

Question 1

Dwelling policies

Answer 1

Unique from homeowners policy
Not required to be owner occupied
Covers risks like rental property, older homes, and hunting cabins.

Question 2

Three dwelling policy forms

Answer 2

DP-1 The basic form (named perils)
DP-2 The broad form (named perils)
DP-3 The special form (open perils)

Question 3

Dwelling policies are called what?

Answer 3

Mono line policies because they insure only property. No theft or liability.

Question 4

Dwelling policies may be used to insure any of the following:

Answer 4

Vacation homes
Rental property
Dwellings with FOUR UNITS - no more than 5 boarders
Dwellings under construction
Mobile homes meeting certain qualifications, including that they are PERMANENTLY LOCATED

FARM DWELLINGS ARE NOT ELIGIBLE FOR COVERAGE

Question 5

Property coverages:

Answer 5

Coverage A- Dwelling 100,000 (80% RC)
Coverage B-other structures (detached from the main dwelling 10% of A
Coverage C-insureds personal property -you decide
Coverage D- Fair rental value 20% of A

Question 6

Coverage A

Answer 6

Covers the dwelling, structures attached to the dwelling, and materials & supplies for use in construction or repair of dwelling or other structures at the location.

Question 7

Coverage B

Answer 7

Other detached structures, insures 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.

Question 8

Coverage C

Answer 8

Personal property covers the insureds personal property that is at the described location and is usual to the dwelling occupancy.

Question 9

Coverage D

Answer 9

Fair rental value covers the insured in the event of a covered loss makes the rental portion of a property unfit for normal use.

Question 10

Coverage E

Answer 10

Additional living expense is included in DP-2 & 3 and pays for additional living expenses the insured incurred after a covered loss.
Including reasonable motel, dining, laundry, and transportation expenses.

Question 11

Other coverages DP-1

Answer 11

Allows use of up to 10% of the coverage A limit of liability for covered losses to other structures as described in coverage B
DP-1 only covers 5 days in storage.

Fire department service charge pays up to $500 when fire dept is called to save or protect covered property from a covered peril.
No deductible applies to this coverage.

Question 12

Other coverages DP-2 & 3

Answer 12

In DP-2 & 3 property removed from the premises to protect from damage is covered for 30 days.

Question 13

Replacement cost coverage

Answer 13

DP-1 pays all losses on an ACV basis. However DP-2 & 3 pay losses to the dwelling and other structures on a replacement cost basis.
Insureds must cover their buildings with insurance equal to 80% or more of the full replacement cost.

Question 14

Coverage forms: Perils insured Against

Answer 14

The following are the only perils that are automatically covered by DP-1:
Fire- only covers damage from an unfriendly fire
Lighting- natural electricity
Internal Explosion- includes the explosion of a furnace, stove, or hot water heater inside the dwelling.

Question 15

Extended coverage (EC) Perils

Answer 15

Wind, civil commotion, smoke, hail, aircraft & vehicles (losing control of vehicle thag crashes into your home)
Volcanic eruption, explosion & riot

Question 16

Vandalism & malicious mischief coverage does not cover:

Answer 16

Vandalism to a building that has been vacant for more than 60 consecutive days.

Question 17

Personal property is covered on a what?

Answer 17

A named broad peril basis— the same perils listed in DP-2

Question 18

Coverage L- personal liability

Answer 18

Provides coverage for damages that the insured becomes legally obligated to pay bc of an occurrence to which the coverage applies that causes bodily injury or property damage
The policy minimum limit is $100,000