Unit 7: Dwelling Insurance Flashcards
Which of the following could be covered under a dwelling policy?
A) Mobile home not permanently located B) Home under construction C) townhouse D) Home rented to another person E) five unit apartment building
B, C, D.
To be eligible a mobile home must be permanently located. And apartment building may not contain more than 4 units.
Which of the following coverages are contained in and unendorsed dwelling policy?
A) dwelling B) other structures C) liability D) personal property E) fair rental value F) medical payment to others
A, B, D, and E.
A dwelling policy automatically includes coverage for the dwelling, other structures, personal property, and fair rental value. Liability and medical payment coverage may be added by endorsements
Which of the following items of personal property would be covered under a dwelling policy?
A) motorcycle
B) poodle
C) pool table
D) sailboat
C: animals, motor vehicles, and most types of boats are excluded under coverage C
A DP-1 automatically provides coverage for..
A) fire B) lightning C) extended coverage perils D) internal explosion E) vandalism and malicious mischief
Fire, lightning, explosion: only perils automatically covered under the DP – 1
Under the DP – one, the insured may opt to have property covered against…
A) fire, lightning, and internal explosion.
B) all of the perils listed in A, plus the extended coverage perils
C)A + B + Vandalism and malicious mischief
D) any of the above
D: fire, lightning, explosion is automatic.
All extended coverage policies and and vandalism or are optional
The DP – two insures against fire, lightning, and which of the following…?
A) The extended coverage parols, V and MM, and additional perils.
B)The extended coverage perils only
C) V&MM only
A: the DP-2 automatically covers all of the standard and optional perils available on the basic form: fire, lightning, the extended coverage perils, and vandalism and malicious mischief
The DP-3 provides…
A)Basic coverage for the dwelling and broad coverage for personal property.
B) broad coverage for the dwelling and basic coverage for personal property
C) Open peril coverage for the dwelling and broad coverage for personal property
D) Open peril coverage for both the dwelling and personal property
C: the DP – 3 also called the special form, provides named peril coverage for personal property and open peril coverage for the dwelling and other structures.
Which of the following other coverages are included in all dwelling forms?
A) collapse B) fire department service charge C) debris removal D) reasonable repairs E) trees, shrubs, and other plants F) property removed G) Glass or safety glazing material
B, C, D, and F. The other coverages listed in the other answer choices are included in the DP-2, and DP-3, but not the DP-1
Under which of the dwelling forms may the insured be reimbursed for the replacement cost when the dwelling is destroyed?
DP-2 & DP-3: Pay losses to the dwelling and other structures on a replacement cost basis. Under the DP – 1, losses are paid on an actual cash value basis
The insured has a DP – three, covering a home that has a replacement value of $100,000. The insured carry $60,000 of insurance. Following a loss it is determined that it would cost $12,000 to replace the damaged portion of the home. How much could the insured collect, assuming the ACV of the loss is $6,000.
A) $6000
B) $9000
C) $12,000
D) zero dollars
$9000: to qualify for replacement cost coverage, the insured must carry insurance equal to 80% of the replacement cost of the building. Since the insured does not carry enough insurance the lost we paid at a proportional replacement cost or actual cash value, whichever is larger. In this case proportional replacement cost $9000 is larger then ACV $6000.
Which dwelling forms pay losses to dwellings and other structures on actual cash value basis?
DP1: paid on an actual cash basis. 2/3 pay on a replacement value basis
Which of the following would be covered under coverage a or coverage B of the dwelling policy?
A) A storage shed hundred feet back of the insureds dwelling where she keeps various yard tools.
B) The detached garage that has been altered to house a manufacturing operation
C)A stack of lumber pleased at the edge of the insureds property that will be used to construct a boat shed
D). A water softener and water heater located in the insureds attached garage
A, C, and D. A detached garage that is used for commercial, manufacturing, or form purposes may not be covered under dwelling policy.
Which of the following losses would be excluded under the DP – 1?
A) Wiley insured is on vacation, a power failure that occurs away from the insured home causes the electricity go off in the insureds neighborhood for 10 hours. As a result large amounts of food stored in the freezer are ruined.
B) The lake overflows and the first story of the insureds home is flooded causing extensive damage
C) following a fire the insured suffers an additional loss because a city ordinance requires that he replaced his frame dwelling with more expensive fire resistant materials
D) and earthquake causes a fire that destroys the insureds home
A, B, and C. Lost by far the results from an earthquake is covered
When Johnson’s home is covered by the DP – three. When a fire damage is the home they are forced to stay at a motel for a month while pairs are made. What coverage would reimburse them for these expenses?
Coverage E: additional living expenses. The DP – number two and DP – three include coverage E – additional living expense.
It pays for additional living expenses the insured incurs after a covered loss including reasonable motel, dining, laundry, and transportation expenses. These are covered at the time needed to repair or replace the damaged property or become settled elsewhere and permanent quarters.
Damage to cover property caused by glass breakage is…
A)covered in all dwelling forms
B)Excluded in all dwelling forms
C) Covered in the DP-2, DP-3 but not the DP-1
C
