Dwelling Policy QUIZ

Jayne has a specified peril policy covering her home. The perils covered include damage caused by fire, lightning, removal, and explosion. Her home is insured for $80,000 with a $500 deductible. After suffering a $16,000 lightning loss, what will Jayne's policy pay?

$15,500. The peril causing the damage is covered by the policy; therefore, after the $500 deductible, Jayne will receive $15,500.

Tom Jackson has a DP-3 on his dwelling property valued at $100,000. He insures the building for $40,000. In the event of a total loss, how much will Tom receive?

$40,000 the loss is total, so there is no concern about the co-insurance rule. In the event of a total loss, the insurer owes the insured the policy limit which, in this case, was $40,000.

fire department service charge is payable when the fire department is called to save or protect property from an insured against peril. maximum payable amount is

$500 with no deducible

You have a DP-3 covering a home that has a replacement value of $100,000. You carry $60,000 of insurance. Following a loss, you determine 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?

$9000 if replacement of home is $100,000 the co-insurance provision requires the insured carry at least 80% of that amount, or $80,000. to determine payment amount you must: -divide the amount carried by the insured ($60,000) by the amount the insured should have carried ($80,000) -then multiply that by the amount of loss ($12,000). - this results in a $9000 payment. -ACV of loss ($6000) is worthless info for this question 60,000/80,000 (12,000)= $9000 payment

Betty Lou has a DP-1 insuring her dwelling for $48,000 and the contents for $24,000. What part of the insurance may she have applied to rental value coverage?

20% of the coverage for the dwelling, which is $9600, with a monthyl limit of $800

The DP-1 covers 11 named perils; the DP-2 covers how many more perils?

4 The DP-2 is still a named peril policy. It covers all the perils of the DP-1 plus 4 more.

the following statements ARE true regarding DP-3:

: insured can apply 10% of "Coverage A" amount for detached garages. 10% extension of Coverage C for contents away from the premises. insured may apply 20% of "coverage A" amount for rental income

under what dwelling form can the insured collect for the replacement cost when dwelling is destroyed

DP-2 and DP-3 ONLY

What statement is NOT correct?

DP3 applies to residential buildings only DP-3 can provide coverage for dwellings, other structures, contents, and rental value.

Which one of the following is eligible property for a dwelling policy?

a four family dwelling

The coverage limit for a dwelling under construction is the:

actual value on the date of completion The dwelling under construction endorsement requires that the insurance on the building be for 100% of its completed value.

reasons to sell your client a DP3 policy opposed to a DP1 policy

add all risk coverage increase peril power change settlement on building losses from ACV to RC

Coverage for removal is available on the DP-1 and the coverage is

all risk coverage All Risk provides coverage for removal on the DP-1.

Coverage B - Other Structures - is in addition to limits on all dwelling property policy forms EXCEPT

basic Other Structures is not considered extra coverage on the DP-1.

replacement cost coverage for dwelling is available under

broad and special forms only. (DP2 and DP3) loss settlement is always ACV for buildings and other structures under DP-1 form

The two additional coverages provided by Broad and Special dwelling forms are

building Collapse, damage to Tree, Shrubs, and Plants There are actually four (4) additional coverages on a DP-2 or DP-3, but the two additional coverages that are mostly on the test include the following: Collapse, Tree, Shrubs, and Plants

Comprehensive Personal Liability

can be endorsed for extra premium Dwelling policies do not cover personal liability; an insured can add this coverage by endorsement for an additional premium. If an insured adds comprehensive personal liability, the policy provides liability coverage to the insured for activities or events occurring both on and off the premises.

The dwelling multipliers are as follows

coverage b is 10% of coverage A coverage D is 20% of coverage A

damage to covered property caused by glass breakage is

covered under DP-2 and DP-3 forms additional coverage for breakage of glass is NOT available on DP-1

Under the other structures coverage of the broad form dwelling policy, all of the following are true

covers a private garage rented for storgage of a car provides 10% extension of coverage provides coverage for a tool shed

Under the doctrine of proximate cause, which would be covered from the fire on a dwelling insurance policy?

damage caused by firemen, smoke damage and water damage proximate cause-P refers to the first event, or first peril, in a series of events that cause damage in an insurance claim. -The proximate cause itself may not do any direct damage. -The insurance policy may cover the proximate cause, but not the event that actually causes the damage, so the policy holder will not be reimbursed for his claim. the following are COVERED losses. the fire is the proximate cause -smoke damage -firemen breaking door down -water damage from sprinkler system

the following would be eligible for coverage under a Dwelling Policy?

duplex single family home four unit building

an owner occupant of a dwelling insured by a dwelling policy is eligible for what type of personal theft coverage?

either limited or broad theft. limited theft endorsement provides coverage for theft on the premises only broad form covers theft on and off premises.

What statement concerning property insured is correct?

fire insurance covers smoke damage from unfriendly fire

What statement concerning property insurance is correct?

fire peril on a dwelling covers smoke damage from a hostile fire A friendly fire is one that is intentionally set and in its intended area such as a fire in a fireplace. If a fire is not in its intended area, it is considered to be a hostile fire; the damage caused by a hostile fire is covered under the policy, but not the damage done by a friendly fire.

The dwelling multipliers are as follows

glass and collapse of strucuure the following ARE included on DP1 DP2 and DP3 -contents -removal to protect -fire

Fire is named as a covered peril on the DP-1 but NOT for damage done by a friendly fire. What is NOT a friendly fire, and therefore covered?

grease fire in kitchen

what statement concerning DP-3 (special form) is NOT true

insured can apply 10% of "Coverage A" amount for farm property the following statements ARE true regarding DP-3: insured can apply 10% of "Coverage A" amount for detached garages. an extension of 10% of the contents limit is provided while property is off premises insured may apply 20% of the "coverage A" amount for rental income

what is true regarding the "broad theft coverage"

insured is required to notify the policy if a theft occurs. covers against theft of property and damage to dwelling as a result of theft endorsement provides for specific limits on certain types of property such as money and jewelry endorsement is available to owner occupants and landlords. the following are NOT true: -it is available for owner-occupant insureds only

Under the other structures coverage of the broad form dwelling policy, all of the following are true EXCEPT

it does NOT provide an additional amount of insurance The 10% extension of coverage to other structures on the broad form DP-2 policy is additional coverage.

If an insured with a dwelling policy has other coverage which is true?

losses are payable in the same proportion that this insurance bears to the total amount of insurance in force If there is more than one policy on the same piece of property, each policy shares in the claim proportionately equal to their share of all the insurance in force.

personal liability and medical payments to others would pay for

medical payments to guests for injuries that occured on your property coverage is paid to others, not to an insured, or resident of the household.

A basic form of dwelling policy provides:

named peril coverage on buildings and contents.

what piece of personal property would be covered under the DP?

pool table the following would NOT be covered -dogs -boats (except rowboats and canoes) -motorcycle or any motor vehicle

Since liability coverage is NOT automatic on the dwelling policy, a person wanting liability coverage on the premises only would buy

premises liability

broad theft coverage endorsement does NOT cover

property of the insured's non-relative, expense sharing roommate. property of a roomer or boarder is NEVER covered by this endorsement

What is NOT a reason to sell your client a DP-3 as opposed to a DP-1 policy?

provide liability protection Liability coverage is not automatic and can be purchased by endorsement on all three DP forms

What is NOT optional coverage on the DP-1

rental value The insured can use up to 20% of the dwelling amount for rental value coverage or purchase a separate amount for this indirect loss. It is not an optional coverage provided by an endorsement.

DP would exclude all of the following EXCEPT:

sinkhole collapse a DP WOULD exclude the following: -flood -govt interference -earthquake

What is NOT included on any of the dwelling forms?

theft of contents and liability Theft of contents and liability do not come automatically on any dwelling fire form. Coverage for these two items must be purchased by endorsement.

What form would provide open peril coverage on a property's contents

this is NOT avilable. The DP-3 is ""all risk"" on the buildings but still only named peril on the contents. ""All risk"" coverage on contents is not available in the DP forms.

Which of the following would NOT be eligible for coverage under a Dwelling Policy?

three family strucutre with 6 families living in it A 3 family structure would qualify but only up to 4 families living it in, not 6.

what is NOT included in dwelling forms

trees, shrubs and other plants. this additional coverage is NOT available on DP-1 the following ARE included on all dwelling forms: -fire dept service charges -reasonable repairs -debris removal

what is NOT additional coverage thats covered under DP-1

trees, shrubs, plants and laws are not an additional coverage under DP-1

What is NOT included in the DP-1 form?

trees, shrubs, plants, lawn, and outdoor radio and TV equipment

the following are NOT eligible for a DP

two family dwelling with the ground floor rented to a beauty parlor single family dweling with the third floor rented to 6 borders a six family dwelling

A dwelling is insured for $60,000 and its contents for $30,000. According to the DP-1, what part of the insurance may the insured have applied to rental value coverage?

up to 20% of Coverage A (dwelling) amount . insured can apply up to 20% of dwelling amount to be used for the indirect loss of rents due to a covered loss. however this payment will reduce the Coverage A amount that's left for damages to the dwelling

what is NOT covered under the Dwelling "basic form" (aka DP-1)

weight of ice and snow damage the following are covered under DP-1 (basic form): -fire -lightning -internal explosion