Types of Dwelling Properties
What 8 coverage forms are always included in the 3 coverage forms?
RRR DTF OW! Rental Repairs Removal Debris Tenant improvement Fire department Other structures Worldwide personal prop coverage
What does open peril refer to?
All perils are insured against EXCEPT those specifically excluded.
What is included in the Condominium Endorsement?
Alteration, Appliances, Fixtures- NOT furniture.
Automatic increase in insurance:
An endorsement that may be added to a swelling policy to increase the amount of insurance by an annual percentage to offset the effects of inflation. This endorsement requires additional premium.
Why is Broad Dwelling common for rentals?
Most do not contain a 60 day vacancy clause.
What is the standard deductible for all property coverages?
$250 (if more than 1 dwelling in same policy, deductible applies separately)
How much will be paid for fire department service?
$500
How much is coverage & deductible in the sump pump/water backup endorsement?
$5000/$250
Describe Coverage E:
*ADDITIONAL LIVING EXPENSES* Only available in Broad & Special Allows family to maintain standard of living For example: rent for alternative housing
Describe Coverage A:
*DWELLING* Includes attached structures and outdoor property Includes repair like lawn mowers Land is NOT covered
Describe Coverage D:
*FAIR RENTAL VALUE* If A, B, or C property is damaged and unfit for normal use, policy pays fair rental value. Does not include expenses that would not continue to be in use like heat and electricity. Coverage stays until repairs are complete, even if the policy expires.
Describe Coverage B:
*OTHER STRUCTURERS* Covers other structures at same location like attached garage. Cannot be rented to others not a tenant of main dwelling. Private garages are still covered.
Describe Coverage C:
*PERSONAL PROPERTY* Guests and servants property insured while on location of property described. 10% of the coverage limit may apply against losses while anywhere in the world. Coverage C is never automatically provided in any DP policies, and a limit must be shown on the dec page with premium charged.
Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy?
10 days.
Removal coverage in a broad form dwelling policy will cover property temporarily removed from the premises for it's own protection for how long?
30 days
Under dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?
30 days.
What percentage of dwelling cost coverage must be maintained for Broad form?
80%
Pair or Set Clause:
A clause in many property and inland marine policies that says the insurer is not obligated to pay for the total value of a set of items if only one item in the set has been destroyed. Diamond earring example: Pair Value: $500 Single earring value: $100 Lost value (amount paid): $400
Which of the following WOULD be covered under a dwelling policy? A: Rowboat B: Motor vehicle C: Air Craft D: Pontoon Boat
A: Rowboat (and canoes)
If more than one person has an insurable interest in the property covered under a dwelling policy, A: The insurer will be liable for only the insured's interest in the damaged property. B: Liability will be split evenly among all people who have insurable interest. C: All involved insurers must decide which one will be liable for the loss. D: All insureds must decide which one will be liable for the loss.
A: The insurer will be liable only for the insured's interest in the loss.
What are the 3 types of Dwelling coverage?
Basic, Broad, Special
Which types of coverage provides losses on a replacement cost basis?
Broad and Special
In what form of coverage would loss of glass be covered under VMM?
Broad, NOT Basic
All of the following are other coverages included in both the broad and special form dwelling policy, EXCEPT A: Breakage of glass B: Lawns, shrubs, plants C: Theft of personal property D: Collapse
C: Theft of personal property can only be included by an endorsement.
Under a DP-3, all of the following is protected EXCEPT: A: Damage from weight of snow B: Damage to the dwelling from burglars C: Theft of personal property located in the dwelling D: Damage caused by vandals
C: Theft of personal property located in the dwelling.
What are the 5 coverages the insured can select from to cover the dwelling?
Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Fair Rental Value Coverage E: Additional Living Expenses
Which dwelling policy provides coverage for additional living expenses incurred by an owner-occupant?
Coverage E: Additional living expenses
Which dwelling coverage is typically not covered in Basic?
Coverage E: Additional living expenses (may be added as endorsement)
If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply: A: When the new policy is written B: When the policy is up for renewal C: Within 60 days D: Automatically
D: It will apply automatically (Liberalization)
Which dwelling policy insures a structure on an actual cash-value basis?
DP-1. DP-2 and DP-3 insure the structure on a replacement cost basis.
What is Special Form DP 03 Exclusions?
Exclusions beside the general exclusions- no coverage for: Insects, birds, vermin Gradual expected losses (wear and tear) Theft of property not party of the building Pollutants Faulty planning
What does the Basic form cover that the Broad form does not?
Explosion of steam boilers or steam pipes.
What does Basic cover?
Fire, Lightning, Internal explosion
When can broad-theft coverage be added as an endorsement?
If the ensured is the owner-occupant of the dwelling. Provides both on-premise and off-premise coverage.
What if a non-insured caused damage to fences or driveways?
In Broad: Covered In Basic: Not covered
How many deductibles would have to be paid if a volcano erupted 6 times in the first 2 days?
Only 1 deductible is due in the first 72 hours regardless of how many explosions there are.
A basic dwelling policy automatically provides coverage against fire, lightning and what?
Internal explosion
What are the 3 additional coverages in Broad?
Lawns, trees, plants Breakage of glass Collapse (result of hidden decay or vermin)
What is involved in a Loss Settlement?
Losses are valued as the LEAST of the following: The actual cash value of the property at the time of loss The policy limit The amount necessary to repair or replace the property The amount reflecting the insured's interest in the property at the time of loss
Loss Payment Condition:
Losses will be paid within 60 days of receiving proof of loss.
Suit Against the Insurer:
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 of the date of the loss.
Which is the only OPEN PERIL form?
Special
What is the only theft coverage provided in any dwelling policy forms?
Theft of property that is part of the building under the special form.
What are the 3 primary differences in coverage between Broad and Special?
Theft: Theft of property that IS part of dwelling is covered in special Overflow of water/steam: off-premise covered in special Falling objects: no exclusions in special
What is the final extended coverage option for basic coverage and when can it be applied?
VMM: Vandalism and Malicious Mischief: Only allowed to add if extended coverage perils are insured on the policy.
What are the 7 additional perils insured in the broad form, beside the basic form perils, the extended coverage perils and the VMM?
WET B OFF Weight of ice, sleet, snow Electrical Tearing/cracking/bulging Burglary Overflow of steam/water Falling objects Freezing plumbing
What are the extended options for Basic?
WHARVES: Wind Hail Aircraft/Vehicle Riot Volcano External explosion Smoke
What exclusions are found in all 3 dwelling forms?
WW OPENING War Water damage Ordinance law Power failure Earth movement Nuclear hazard Intentional loss Neglect Government action
How many days notice is needed for cancellation due to nonpayment?
Within 60 days of coverage: 10 days After 60 days: 30 days