Chapter 4 - Dwelling Policy
Coverage A stipulates
'We do not cover land, including land on which the dwelling is located'.
The Basic Dwelling Form - DP-1 provides coverage for
- Fair Rental Value. - Additional Living Expenses is available by endorsement.
Coverage E - Additional Living Expense
- incurred by the insured when an owner-occupied dwelling sustains a direct loss. -deemed those sustained by an insured household in order to maintain its normal standard of living. - increased auto expense of driving a greater distance to and from work as the result of a direct loss.
DP-2 : The Dwelling Broad Form (DP-2)
-Breakage of glass that is a part of a building, storm door or window -Accidental discharge or overflow of water or steam from a heating or air conditioning system or household appliance -Damage caused by burglars (but not property taken by burglars)
All of the following perils are included under the Dwelling Broad Form
-Burglary Damage -Falling Objects -Volcanic Eruption
Dwelling Coverages
-Coverage A -Dwelling -Coverage B-Other Stuctures -Coverage C-Personal Property -Coverage D-Fair Rental Value -Coverage E-Additional Living Expenses
Coverage C - Personal Property
-Coverage C applies to household and personal property usual and incidental to the occupancy of the premises, and owned by the insured or by members of the insured's family residing with the insured while it is on the described location.
Coverage C - Personal Property
-Coverage C will cover personal property of a guest or servant while the property is on the described location. Personal property of a tenant or boarder is not covered.
Coverage C - Personal Property
-Coverage automatically applies to personal property the insured removes from the location to a newly acquired principal residence for 30 days or until policy expiration, whichever occurs sooner.
The Dwelling Broad Form (DP-2) includes coverage
-Damage caused by burglars -but not property taken by burglars -Breakage of glass that is a part of a building, storm door or window -Accidental discharge or overflow of water or steam from a heating or air conditioning system or household appliance
Coverage A of a Dwelling Policy, all of the following are included
-Fire or lightning damage to outdoor television antennas -Materials for repairing the dwelling, located on the described location -Outdoor equipment on the location used to service the dwelling
DP-3 (Special Form)
-The dwelling and other structures are covered for all direct physical damage on an open perils basis, except for perils specifically excluded by the policy. -Theft of property that is part of the dwelling or other structures is covered as long as the dwelling or other structures have not been vacant for more than 60 days. -Personal property is covered for loss by any of the Broad Form (DP-2) perils. - replacement cost basis, subject to an 80% coinsurance provision, and losses to personal property are paid on an actual cash value basis to the insured.
Coverage A - Dwelling
-attached garage or carport -materials and supplies on or next to the described location for the alteration or repair of the dwelling or other structures - The limit of liability for Coverage A is specified in the policy. -This coverage does not apply to land, including land on which the dwelling is located.
Coverage B - Other Structures
-detached from the dwelling, such as sheds, outbuildings, and detached garages. -Coverage does not apply to land, including land on which the other structures are located, as well as structures used for commercial, manufacturing, or farming purposes.
DP-1 (Basic Form)
-fire, lightning, and internal explosion -covering losses from wind, hail, aircraft, riot, vehicles, explosion, and smoke (WHARVES), and volcanic eruption (other than loss caused by earthquake) -The perils of vandalism and malicious mischief may be covered by adding the optional Vandalism and Malicious Mischief Endorsement (VMM) for an additional premium. -The vehicle peril does not include loss to a fence, driveway, or walk caused by a vehicle owned or operated by the insured -The smoke peril does not include loss caused by smoke from agricultural smudging or industrial operations. -If the optional Vandalism and Malicious Mischief Endorsement (VMM) is added, it excludes loss for vandalism occurring after 60 days of vacancy. Losses to the dwelling, other structures, and contents are paid on an actual cash value (ACV) basis.
Under the Basic Dwelling Form, losses are paid on a(n) ____ basis.
Actual Cash Value -The Basic Dwelling Form is designed to provide basic no frills coverage at a minimum cost. Hence, losses are paid on an Actual Cash Value, rather than Replacement Cost basis.
The Basic (DP-1) Dwelling Form does not include:
Additional Living Expenses
DP-1
Basic -provides only Actual Cash Value coverage
DP-2
Broad
DP-2 & DP-3 ( Broader Forms )
Burglars is covered
the Dwelling Broad Form
Burglary Damage/Volcanic Eruption/Falling Objects
materials on premises intended for repair or alterations?
Coverage A
Under the Dwelling Forms, which coverage applies to the building described in the policy, including materials on premises intended for repair or alterations?
Coverage A -Coverage A applies to the Dwelling at the described location; Coverage B, to Other Structures; Coverage C, to Personal Property; Coverage D, to Fair Rental Value, and Coverage E to Additional Living Expenses.
Coverage A
Coverage A includes materials and supplies located on or next to the Described Location used to construct, alter, or repair the dwelling on the Location.
Under a Dwelling Policy, detached structures on the insured premises are included in:
Coverage B
Under the Dwelling Policy, household and personal property, including property damaged in transit between the insured's old and new residences, are covered under:
Coverage C
Under the Dwelling Policy, household and personal property, including property damaged in transit between the insured's old and new residences, are covered under:
Coverage C -Coverage C is the coverage for Personal Property. 10% of the Coverage C limits apply to the Insured's Personal Property away from the premises anywhere in the world.
Coverage D - Fair Rental Value
Coverage D is an indirect loss coverage that applies following a direct loss to property described in Coverages A, B, or C. This coverage pays the fair rental value of the part of the described location that is rented to others at the time of a loss.
Coverage E - Additional Living Expense
Coverage is an indirect loss property coverage that applies following a direct loss to property described in Coverages A, B, or C, and is automatically included only in the DP-2 and the DP-3.
Coverage C - Personal Property
Coverage specifically excludes: accounts, bank notes, coins and currency; birds, animals, and fish; watercraft other than rowboats or canoes; motor vehicles other than those used to service the described location or to assist the handicapped; electronic data processing tapes, wires, and records; and credit cards or fund transfer cards.
What coverage is provided by Coverage D of the Dwelling Policy?
Fair Rental Value
Which is not eligible to be insured under a Dwelling Policy?
Farms -The farm property exposure includes hazards not found in other residential property. Insurance companies have developed special Farm Forms for farm property insurance.
Under the Dwelling Policy Forms, which losses would be covered?
Fire damage to building materials and supplies that are located on the insured premises
Coverage A , except:
Land, including the land on which the dwelling is located
Under Coverage A of a Dwelling Policy, all of the following are included, except:
Land, including the land on which the dwelling is located
Under the Basic Dwelling Form, is damage caused by vandalism automatically included?
No, it must be added by endorsement -The Basic Dwelling Form is designed to provide coverage at a minimum cost. If the insured desires vandalism coverage, attaching a Vandalism Coverage endorsement and charging a premium for the endorsement provides it.
Basic Form (DP-1)
Of the Dwelling Policy Forms, which one does not cover Damage by Burglars?
Under Coverage C of the Special Dwelling Form, all of the following are included, except:
Pets belonging to the insured
Under the Dwelling Broad Form, losses to a building are paid on a(n) ____ basis.
Replacement Cost
the Dwelling Broad Form, except
Smoke damage -however, the description of the peril specifically excludes smoke from agricultural smudging or industrial operations.
the Dwelling Broad Form, except:
Smoke damage from industrial operations
All of the following perils are included under the Dwelling Broad Form, except:
Smoke damage from industrial operations -Smoke damage is a covered peril of the Dwelling Broad Form; however, the description of the peril specifically excludes smoke from agricultural smudging or industrial operations.
DP-3
Special
Special Form (DP-3) Dwelling Policy?
Subject to coinsurance, coverage for the structure is provided on a replacement cost basis
Special Form (DP-3) Dwelling Policy?
Subject to coinsurance, coverage for the structure is provided on a replacement cost basis -DP-3 policies cover physical damage losses to the structure on a replacement cost basis, subject to the usual 80% coinsurance requirement. Personal property is covered on an ACV basis, subject to policy limits.
Which statement is true of a Special Form (DP-3) Dwelling Policy?
Subject to coinsurance, coverage for the structure is provided on a replacement cost basis -DP-3 policies cover physical damage losses to the structure on a replacement cost basis, subject to the usual 80% coinsurance requirement. Personal property is covered on an ACV basis, subject to policy limits.
Coverage B - Coverage Limits
The Coverage B limit of insurance is 10% of the Coverage A limit. - On the DP-1 form ,this limit is included in the total amount of insurance available, -in the case of the DP-2 and DP-3, this limit is in addition to the amount of insurance available in the Coverage A limit. -Neither Coverages A nor B cover wind, hail, ice, snow, or sleet damage to outdoor radio and television antennas and aerials, including their lead-in-wiring.
Coverage D - Fair Rental Value
The Coverage D limit of insurance is up to 20% of the Coverage A limit and is automatically included under each of the dwelling forms. On the DP-1 form, this limit is included in the total amount of insurance available, while in the case of the DP-2 and DP-3, this limit is in addition to the amount of insurance available in the Coverage A limit.
Coverage E - Additional Living Expense
The Coverage E limit of insurance is up to 20% of the Coverage A limit, and this amount of insurance does increase the amount of insurance available beyond the Coverage A limit.
Under Dwelling Policies, which of the following require the policy to be written to at least 80% of the full replacement cost of the dwelling at the time of loss to provide replacement cost coverage?
The DP-2 and the DP-3 - replacement cost coverage, provided, that the insured insures the property to at least 80% of its replacement cost. The DP-1 (Basic) provides only Actual Cash Value coverage
Which statement concerning the Dwelling Special Form is true?
The Dwelling and other structures are provided Open Perils coverage on a Replacement Cost basis,but the Personal Property coverage remains as Broad Perils coverage on an Actual Cash Value basis.
the Dwelling Special Form is true?
The Dwelling and other structures are provided Open Perils coverage on a Replacement Cost basis,but the Personal Property coverage remains as Broad Perils coverage on an Actual Cash Value basis.
Which statement concerning the Dwelling Special Form is true?
The contents are covered for the Broad Form perils on an Actual Cash Value basis
Which statement concerning the Dwelling Special Form is true?
The contents are covered for the Broad Form perils on an Actual Cash Value basis -Although the Dwelling Special Form provides Open Perils Coverage for structures, it retains Broad Form Perils coverage on Coverage C, Personal Property.
Which statement concerning the Dwelling Special Form is true?
The contents are covered for the Broad Form perils on an Actual Cash Value basis - Although the Dwelling Special Form provides Open Perils Coverage for structures, it retains Broad Form Perils coverage on Coverage C, Personal Property.
Coverage C - Personal Property
The insured may use up to 10% of the Coverage C limit of insurance for loss caused by an insured peril to covered property removed from the premises, except rowboats and canoes, anywhere in the world.
DP-2 Which of the following losses is not covered under a DP-2 (Broad Form) policy?
Theft of personal property -Although Broad Form Dwelling policies cover damage to property done by burglars, they do not cover theft of personal property.
Coverage C
Under the Dwelling Policy, household and personal property, including property damaged in transit between the insured's old and new residences, are covered under:
The Dwelling Broad Form (DP-2) includes coverage for all of the following, except:
Water damage by flood
The Dwelling Broad Form (DP-2) includes coverage for all of the following, except:
Water damage by flood -There is no flood coverage in a dwelling policy.
Which of the following is not a covered peril under the Extended Coverage Endorsement to the DP-1?
Weight of ice, snow or sleet
DP-1 Which of the following is not a covered peril under the Extended Coverage Endorsement to the DP-1?
Weight of ice, snow or sleet - is not part of the Extended Coverage perils.
The Dwelling Policy
cannot have more than 4 apartment units, nor more than 5 occupants in total.
DP-2 (Broad Form)
covers all the perils listed in DP-1 (including the ECE and VMM endorsements), plus: -Damage by burglars -Falling objects -Weight of snow, ice, and sleet -Accidental discharge or overflow of water or steam -Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, air conditioning, or automatic fire protective sprinkler system, or an appliance for heating water -Freezing of a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, or of a household appliance -Sudden and accidental damage from artificially generated electrical current -The burglary damage peril includes damage to the covered property caused by the burglar, but not theft of property. -Losses to the dwelling and other structures are paid on a replacement cost basis, subject to an 80% coinsurance provision, and losses to contents are paid on an actual cash value basis to the insured.
DP-1:Basic Form
does not cover Damage by Burglars
Coverage B
is the coverage for other structures on the Insured Location. The other structures must be set apart from the dwelling by clear space.
Damage by Burglars is covered
only in the broader Forms DP-2 and DP-3.
DP-3
physical damage losses to the structure on a replacement cost basis, subject to the usual 80% coinsurance requirement. Personal property is covered on an ACV basis, subject to policy
The Basic Dwelling Form (DP-1)
provides coverage for Fair Rental Value. Coverage for Additional Living Expenses is available by endorsement.
The Dwelling Broad Form
provides for building losses to be paid on a replacement cost basis, if the amount of insurance carried is equal to at least 80% of the replacement cost of the property insured.
Coverage C
the coverage for Personal Property. 10% of the Coverage C limits apply to the Insured's Personal Property away from the premises anywhere in the world
Coverage E
to Additional Living Expenses.
Coverage D
to Fair Rental Value,
Coverage B
to Other Structures
Coverage C
to Personal Property
Coverage A
to the Dwelling at the described location
The Dwelling Policy
used to insure private residential property that is not occupied by its owner, such as rental property, as well as some owner-occupied private residential property that does not qualify for a Homeowners policy because of age, value, or location.
