Unit 6: Dwelling Insurance

Flashcards

Dwelling Policy Purpose

To provide property coverage for dwellings not eligible for homeowners insurance.

Three Forms of Dwelling Policies

DP-1 (Basic), DP-2 (Broad), and DP-3 (Special).

Dwelling Form with Most Limited Coverage

DP-1 (Basic Form).

Dwelling Form providing Open Peril Coverage

DP-3 (Special Form).

Type of Peril Coverage - DP-2

Named peril coverage for both dwelling and contents.

Theft Included in Dwelling Policies?

No, theft must be added by endorsement.

Coverage A

Coverage for the dwelling structure itself.

Coverage B

Coverage for other structures (detached garages, sheds).

Coverage C

Coverage for personal property of the insured.

Coverage D

Coverage for fair rental value.

Coverage E

Coverage for additional living expenses (DP-2 and DP-3 only).

Standard Perils in DP-1

Fire, lightning, internal explosion.

Optional Perils Added to DP-1

Extended coverage perils and vandalism & malicious mischief (VMM).

Additional Perils in DP-2

Falling objects, weight of ice/snow, discharge of water, freezing, tearing apart.

Perils Excluded in DP-3

Flood, earthquake, ordinance or law, intentional loss, war, nuclear hazard.

Valuation Method for DP-1

Actual cash value (ACV) for all losses.

Valuation Method for DP-2 and DP-3 (Buildings)

Replacement cost if insured to at least 80% of value.

Valuation Method for DP-2 and DP-3 (Personal Property)

Actual cash value.

Liability Coverage Included in Dwelling Policies?

No, it must be added by endorsement (Personal Liability Supplement).

Automatic Increase in Insurance Endorsement

An annual increase in Coverage A to keep up with inflation.

Dwelling Under Construction Endorsement

Provides coverage for a dwelling being built; coverage increases as construction progresses.

Rental Value Endorsement

Extends Coverage D for fair rental value beyond the normal limits.

Broad Theft Endorsement

Provides theft coverage for owner-occupied dwellings.

Limited Theft Endorsement

Provides theft coverage for non-owner-occupied dwellings.

Ordinance or Law Exclusion

Excludes loss due to enforcement of building codes unless endorsed.

Personal Liability Supplement Cover

Liability and medical payments to others.

Eligible for Dwelling Policy

People who own rental property, seasonal homes, or older homes not eligible for homeowners.

Dwelling Policy for Mobile Homes?

Yes, with appropriate endorsements.

Coverage Territory for Dwelling Policy

The U.S., its territories, and Canada.

Not Covered Under Coverage C

Animals, motor vehicles, aircraft, boats (except small rowboats or canoes).