Chapter 4 – Dwelling Policy – Flashcards

Water damage by flood -There is no flood coverage in a dwelling policy.

-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 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.

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 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.

Of the Dwelling Policy Forms, which one does not cover Damage by Burglars?

only in the broader Forms DP-2 and DP-3.

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.

Farms -The farm property exposure includes hazards not found in other residential property. Insurance companies have developed special Farm Forms for farm property insurance.

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.

Coverage B

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.

cannot have more than 4 apartment units, nor more than 5 occupants in total.

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.

Smoke damage from industrial operations

Smoke damage -however, the description of the peril specifically excludes smoke from agricultural smudging or industrial operations.

Burglary Damage/Volcanic Eruption/Falling Objects

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

Broad

Special

Basic -provides only Actual Cash Value coverage

Replacement Cost

Additional Living Expenses

provides coverage for Fair Rental Value. Coverage for Additional Living Expenses is available by endorsement.

- Fair Rental Value. - Additional Living Expenses is available by endorsement.

Water damage by flood

-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)

Coverage A

to the Dwelling at the described location

to Other Structures

to Personal Property

to Fair Rental Value,

to Additional Living Expenses.

Subject to coinsurance, coverage for the structure is provided on a replacement cost basis

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

Weight of ice, snow or sleet - is not part of the Extended Coverage perils.

Theft of personal property -Although Broad Form Dwelling policies cover damage to property done by burglars, they do not cover theft of personal property.

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.

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, household and personal property, including property damaged in transit between the insured's old and new residences, are covered under:

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

Fire damage to building materials and supplies that are located on the insured premises

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.

Land, including the land on which the dwelling is located

-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

does not cover Damage by Burglars

Burglars is covered

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.

Replacement Cost

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.

provides coverage for Fair Rental Value. Coverage for Additional Living Expenses is available by endorsement.

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.

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.

-Burglary Damage -Falling Objects -Volcanic Eruption

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.

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.

Land, including the land on which the dwelling is located

'We do not cover land, including land on which the dwelling is located'.

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.

-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.

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.

-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 -Coverage B-Other Stuctures -Coverage C-Personal Property -Coverage D-Fair Rental Value -Coverage E-Additional Living Expenses

-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.

-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.

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 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 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 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.

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.

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.

Pets belonging to the insured

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.

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.

Fair Rental Value

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.

- 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.

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.

Weight of ice, snow or sleet

The contents are covered for the Broad Form perils on an Actual Cash Value basis

Coverage C