Chapter 5 Insurance Exam

Dwelling Program Eligibility

may be owner-occupied or tenant-occupied, but they must be used principally for residential purposes, with up to 4 dwelling units and no more than 5 roomers or boarders; farm dwellings are not eligible

Dwelling Coverage (A)

applies to the residential dwelling described in the Declarations, including structures attached to the dwelling (attached garage, carport, breezeway, or deck)

Other Structures Coverage (B)

applies to structures other than the dwelling that are on the described location and that are detached from the dwelling by a clear space; is equal to 10% of the dwelling limit

Personal Property Coverage (C)

applies to household and personal property (contents) usual to the occupancy of a dwelling; includes anything the insured owns or uses, and anything owned or used by the insured’s family members who live with the insured

Fair Rental Value Coverage (D)

applies when a portion of the described location is rented to others, and it provides insurance for indirect losses that occur as a result of covered direct losses to property insured under Coverages A,B, or C; equal to 20% of dwelling (A) limit

Additional Living Expense Coverage (E)

provides insurance for indirect losses that occur as a result of covered direct losses to property insured under Coverages A,B, or C

Coverage Form DP-1 (Basic Form)

basic insurance coverage to the dwelling, its contents, and other structures on the premises against 3 named perils: fire, lightning, and internal explosion;

Vandalism or malicious mischief (VMM)

coverage includes coverage for building damage caused by burglars, but it excludes all theft losses

Extended Coverage (EC)

may be added for an additional premium; windstorm and hail, riot or civil commotion, vehicles, volcanic eruption, explosion, smoke

Coverage Form DP-2 (Broad Form)

covers the dwelling, its contents, and other structures against named perils, including the basic perils on the DP-1, the EC and VMM perils, as well as: damage by burglars, falling objects, weight of ice/snow/sleet, accidental discharge/overflow of water/steam, suddent and accidental tearing apart/cracking/burning/bulging of systems (water heating, air conditioning, etc), freezing (plumbing, heating, etc), damage from electrical current

Extended Coverage — WHARVVES

Windstorm and Hail, Aircraft, Riot and civil commotion, Vehicles, Volcanic action, Explosion, Smoke

Coverage Form DP-3 (Special Form)

offers the broadest coverage; coverage for the dwelling and other structures is provided on an open perils basis, meaning the form insures against all direct physical loss to property, including the Broad Form, and does not cover losses resulting from perils specifically excluded

Coverage Form DP-4 (Tenants Form)

no longer exists; provided coverage to personal property against the basic named perils, with the option to add the EC, VMM, or other perils by endorsement

Debris Removal

the policy pays the insured’s reasonable expenses for the removal of debris of covered property if the property is damaged by an insured peril

Improvements, Alterations, and Additions

if the insured is a tenant, they may use up to 10%of coverage C limit; coverage included in the DP-1, additional for DP-2 and DP-3

Worldwide Coverage

the insured may use up to 10% of the coverage C limit of liability for a covered loss to property insured under coverage C while it is located anywhere in the world

Reasonable Repairs

if covered property is damaged by an insured peril, the policy will pay the reasonable costs incurred by the named insured for necessary measures taken to protect covered property from further damage

Property Removed

if property is being removed from the described location because it is endangered by a covered peril, coverage is provided for direct loss by any peril while removed

Fire Department Service Charge

under all of the dwelling forms, the policy will pay up to $500 for the named insured’s liability assumed by contract or agreement for fire department charges incurred when another city/district’s fire department is called to save or protect covered property from an insured peril; additional insurance

Trees, Shrubs, and Other Plants

applicable to broad and special only; coverage provided for fire/lightning, explosion, riot/civil union, aircraft, vehicles not owned by the named insured, vandalism but not property theft; limit is up to 5% of coverage A, with a maximum of $500 applying any one plant; additional insurance

Collapse

the abrupt falling down or caving in of a building, or any portion of a building, but only if it cannot be occupied for its intended purpose

Glass or Safety Glazing Material

coverage is provided for the breakage of glass or safety glazing material if it is part of a covered building, storm door, or storm window

Ordinance or Law

coverage applies to increased costs incurred by the named insured due to the enforcement of any ordinance or law that requires or regulates the construction, demolition, remodeling, renovation, or repair of a covered building or structure damaged by a covered peril

General Exclusions

ordinance or law, earth movement, water, power failure, neglect, war, nuclear hazard, intentional loss, governmental action,

Automatic Increase in Insurance Endorsement

used to help offset inflation and may be referred to as the Inflation Guard Endorsement; allows for an automatic increase in coverage A and B limits

Broad Theft Coverage Endorsement

covers direct physical loss to personal property owned or used by an insured caused by theft, attempted theft, or any connected vandalism or malicious mischief

On-premises coverage

provided for covered property at the described location or placed for safekeeping in any bank, safe deposit company, or public warehouse

Off-premises coverage

provided when covered property is away from the described location if the property is owned or used by an insured, or owned by a residence employee

Limited Theft Coverage Endorsement

essentially the same as Broad Theft Coverage, except that coverage is only available for property on the premises, and the broad definition of insured does not apply

Dwelling Under Construction Endorsement

needed because eligibility for the dwelling property coverage requires insured dwellings to be occupied for residential purposes, and dwellings under construction are not occupied

Personal Liability Supplement

can be written as either a separate policy or a Dwelling policy endorsement to cover the insured’s liability exposures related to the residence premises, meaning the premises must be occupied by the insured

Coverage L - Personal Liability

applies to claims made or suits brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which the policy applies; standard limit is $100,000

Coverage M - Medical Payments to Others

applies to claims for the necessary medical expenses incurred or medically ascertained within 3 years from the date of bodily injury