ExamFX (Dwelling Policy)

Dwelling policy

Boarder

A person who lives with someone else for an agreed upon price, usually for a considered amount of time.

Incidental occupancy

Temporary lodging arrangement that typically involves a fee.

It is often used in insurance contexts to refer to short-term rentals or guests.

ex. A piano teacher giving lessons in her home

Occurrence

An accident or event

Ordinance

A law that establishes building regulations, which may dictate how structures must be constructed or modified to ensure safety and compliance with local standards.

Overinsurance

When a property’s insurance coverage exceeds its cash value

Personal property

Refers to movable items that are not attached to the structure, such as furniture, electronics, and personal belongings.

Premises

A house or a building (including land and outer buildings) utilized by a business

Real property

Refers to land and anything permanently attached to it, such as buildings, structures, and improvements.

Vandalism

The intentional destruction or damage of property, often resulting in financial loss or repair costs.

Dwelling property policy

A type of insurance policy that provides coverage for residential properties against various risks, ensuring protection for both the structure and certain personal belongings.

Dwelling policy insures

Up to 5 roomers of boarders

Up to 4 residential units

Properties in the course of construction

Owner occupied, tenant occupied or both

Mobile homes on the basic form only, if they contain more than 1 apartment, and are located at a permanent location

Seasonal dwellings unoccupied for 3 or more months during a 12 month period

Not designed as a farm property

DP form structure

Agreement

Definitions

Deductible

Coverage, including other coverages

Perils insured against

General exclusions

Conditions

Types of DP forms

DP1 - Basic (named peril)

DP2 - Broad (named peril)

DP3 - Special (Open and named peril)

DP1 Basic named peril coverage form

Fire

Lightning

Internal explosion

DP1 Option 1 extended coverage perils (for add premium)

(WHARVES)

Windstorm

Hail,

Aircraft,

Riot,

Volcanic eruption,

Explosion (Explosion does not have to occur inside the dwelling)

Smoke (Not included: smoke from agricultural smudging or industrial operations, or from a fireplace)

DP1 option 2 extended perils (for add premium)

(WCSHAVER)

Windstorm

Civil commotion
Smoke
Hail
Aircraft
Vehicle
Explosion
Riot

Vandalism or malicious mischief

Covers loss or damage from willful and malicious destruction of the insured property.

Not covered:

Glass breakage or safety glazing materials that is not part of the building

Actual property stolen

Vacant for more than 30 consecutive days

DP2 Broad form coverage perils

Basic form + Extended coverage perils + VMM + Broad form perils

Breakage of glass for VMM is covered

Explosion peril no longer has the exceptions listed as in the basic form

Additional Broad form Perils (DP2)

(BB-BICEGOLF)

Burglary

Bursting of heating systems

Breaking of water heaters

Ice, snow or sleet

Collapse of bulding or part of building

Electrical damage (artificially generated)

Glass breakage

Objects falling from outside

Leakage of water or Steam damage

Freezing of plumbing

Additional coverage to lawns, trees, plants and shrubs

DP3 Special form coverage (open peril)

All perils are insured against except those specifically excluded

Policy form - Property coverages

Coverage A - Dwelling

Coverage B - Other structures

Coverage C - Personal property

Coverage D - Fair rental value

Coverage E - Additional living expenses

Coverage A - Dwelling

Dwelling listed on declarations page and all attached structures

Material used to construct, alter or repair the dwelling

Building equipment and outdoor equipment

NOT covered:

Land, including land on which the dwelling is located

Coverage B - Other structures

Covers separate structures at the same location such as detached garages and other outbuildings (sheds or fences)

Makes allowances for other structures used for a business withing defined parameters

NOT covered:

Land

Structures or held for rental to anyone other than tenant when not used as a private garage.

Other structures that are used in business (commercial, manufacturing or farming)

Gravemarkers and mausoleums

Coverage C - Personal property

Personal property usual to a residence, as well as property of guest or servants

Model or hobby aircraft including parts (not to carry people or cargo)

Motor vehicles and other conveyances (used to service the premises)

Portable electronic equipment that reproduces, receives or transmits audio, visual or data signals

Rowboats and canoes

Blank storage media and prepackaged computer software

Property moved to a newly acquired residence for 30 days.

NOT covered:

Coins, gold, silver, currency (other than goldware/silverware)

medals, securities, bills, accounts, bank notes,deeds, passports, evidence of debt, smart cards

Animals, birds, fish

Aircraft used or designed for flight

Hovercraft and parts

Watercraft (other than rowboats and canoes)

motor vehicles (other than those used to service the premises)

Cost to restore data

Credit cards, debit cards or any device used to deposit or withdraw funds.

Water or steam

Gravemarkers and mausoleums

Coverage D - Fair rental value

Applies under coverage A, B,or C becomes damaged or destroyed by a covered peril

Coverage continues until repairs are completed. but only for the shortest time required

If a civil authority prohibits use (Payment of the loss will be covered for up to 2 weeks)

Coverage does not apply to any loss or expense associated with cancelation of a lease.

Coverage E - Additional living expenses (broad/special form)

Added by endorsement to basic form

Indirect coverage.

ex. Rent for alternative housing

Other coverages (DP1,DP2,DP3)

Other structures (up to 10% in coverage A)

Debris removal

Improvement, alterations, and additions (up to 10% in coverage C)

Worldwide coverage

Rental value and additional living expense (up to 20% in coverage A)

Reasonable repairs

Property removed (coverage for up to 5 days in basic form and up to 30 days in broad and special form)

Fire department service charge (up to $500 and no deductible)

ONLY in Broad Special form:

Lawns, trees, shrubs and plants ($500 per tree, shrub or plant or 5% of the amount of coverageon the dwelling, whichever is greater)

Breakage of glass

Collapse

Ordinance or law (up to 10%)

General exclusions in all 3 dwelling forms

Ordinance or law

Water damage

Earth movement and flooding.

Power failure

Neglect

War

Nuclear hazzard

Intentional loss

Governmental action

Special form DP3 additional exclusions (only coverage A and B)

Weather conditions to the extend they contribute to an excluded cause of loss

Acts, decisions, or failure to act

Faulty planning, design or materials

Conditions

Policy period

Insurable interest and limit of insurance

Concealment or fraud

Duties after loss (within 60 days)

Loss settlement

Pair or sets

Appraisal (within 20 days)

Other insurance

Subrogation

Suit against the insurer (within 2 years of date of loss)

Insurer’s option to repair or replace (within 30 days)

Loss payment (within 180 days)

Abandonment

Mortgage holders

No benefit to the bailee

cancellations and nonrenewal

Liberalization (within 60 days)

Assignment

Death

Nuclear hazard

Recovered property

Volcanic eruption (within 72 hours considered 1 occurrence and there will only be one deductible)

Loss payable clause

In NEW YORK:

Loss payment (must be paid within 60 days of receiving proof of loss)

Cancellation for non payment (15-day notice of cancellation)

Cancellation when policy has been in affect for 60 days (within 30 days of notice)

Insurer may amend limits of liability or reduce coverage (notification by mail within 20 days prior to the date of change)

Nonrenewal (must be notified at least 45 days but no more than 60 days in advance)

Endorsements

Dwelling under construction

Broad theft (NO coverage if vacant for more than 60 days)

applied for 30 days

Coverage limits

$200 for money, bank notes, bullion, gold, silver

$1500 for securities, accounts, deeds, evidences of debt, ticket or stamps

$1500 for watercraft and their trailers, furnishings, equipment

$1500 for other trailers

$1500 for jewelry, watches, furs, and precious stones

$2500 for firearms and related equipment

$2500 for silver and silver-plated ware, goldware, flatware, trays, and trophies.

Exclusions

Animals, birds and fish

credit cards and funds transfer cards

Aircraft hovercraft and their parts

property while in the mail

property held as a sample or for sale

property insured by another insurance

property of tenants, roomers, and boarders and their relatives

business property or resident employee

property in custody of a laundry, cleaner, taylor etc.

motor vehicles (other than used to service location)

motor vehicle equipment and accessories including sound receiving, transmitting or recording devices while in the vehicle

Personal liability supplement

Not included in dwelling policy but can be added or written as a separate policy. Limit of $100,000 per occurrence and $1000 per person for medical payments to others. May be increased for additional premium

Coverage L - Personal liability

Coverage M - Medical payments to others

and additional coverages

Additional coverages (Personal liability)

Claim expenses

First aid to others

Damage to property of others

Coverage provided by personal liability

Bodily injury or property damage to third parties that is caused by the insured’s negligence or a condition of the insured’s premises.

Medical payments pays

necessary medical expenses incurred by persons other than an insured, who are injured on the insured’s premises or due to an insured’s activities off premises.

Which dwelling coverage form (s) will pay for the replacement cost of a dwelling?

DP2 and DP3

What do dwelling policies insure?

Dwelling only, contents only, or both

An insured’s house becomes uninhabitable due to damage by fire. As a result the insured has to rent an apartment until repairs are made. Which type of coverage under the dwelling policy will pay for the expense of renting the apartment?

Coverage E additional living expenses

Under what conditions can broad theft coverage be added to a dwelling policy?

if the insured is the owner-occupant of the dwelling

If an insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply on a pro rata basis at both locations for how long?

up to 30 days

In dwelling policies, what is the purpose of the automatic increase in insurance endorsement that increases the amount of insurance by an annual percentage?

To help protect against inflation and ensure coverage remains adequate over time.

Which dwelling policy coverage will provide protection for contents damaged by fire in an insured dwelling?

Coverage C: Personal Property

Loss that would not be covered under coverage A in a dwelling policy

Theft of a renter’s lawnmower used to service the premises

*Not covered because the dwelling is rented to others without content coverage.

On a DP3 dwelling property Special form policy, the coverage provided for personal property is

The same as provided on the DP2 broad form

*Although coverages A and B on a DP3 are written on an open peril or all-risk basis, the coverage for personal property is written on a named or specified peril.

A dwelling policy has a standard deductible that applies to all property coverage, except fair rental value, additional living expense, and the fire department service charge. How much is this deductible?

$250

*A standard deductible applies to all property coverage, except fair rental value, additional living expense and the fire department service charge.

The removal coverage that is included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?

30 days