Level 3 chapter 1

Question 1

dwelling policies

Answer 1

limited insurance for a home that generally does not include coverage for theft or personal liability

Question 2

How are dwelling policies used today?

Answer 2

Used for small property’s, Vacation Homes, or under construction houses.

Question 3

Dwelling policies qualification’s

Answer 3

must have no more than four units and farms aren’t covered

Question 4

Insurance Services Office

Answer 4

Create ISO forms that are usually the blueprints of a policy. Dwelling policies often follow these ISO forms

Question 5

Coverage A

Answer 5

Dwelling & attached structures (home, attached garage, fixtures, raw materials). The chosen Coverage A limit often determines other coverage limits.

Question 6

Coverage B

Answer 6

Detached structures (e.g., separate garage), usually 10% of Coverage A

Question 7

Coverage C

Answer 7

Owner’s personal property (not tenants’), sometimes limited to 10% for property away from the dwelling.

Question 8

Coverage D

Answer 8

Fair rental value if the property is uninhabitable due to a covered peril, often 20% of Coverage A.

Question 9

Coverage E

Answer 9

Coverage E

Question 10

Other Benefits of Dwelling Policies

Answer 10

Debris removal after a covered peril (because nobody wants to clean up after a tornado or a fire)
Temporary repairs to prevent further damage while permanent fixes are underway
Coverage for trees and plants (though usually capped at around $500 per tree)
Fire department service charges, typically up to $500, if you get billed after they save the day

Question 11

DP-1

Answer 11

Basic Form
Insures the dwelling at actual cash value (not replacement cost).

Covers fire, lightning, and internal explosion by default.

No additional living expenses coverage.

Detached structures affect the dwelling limit (not additional).

Common endorsements can add coverage for:

WC SHAVER perils (Wind, Civil commotion, Smoke, Hail, Aircraft, Vehicles, Explosion, Riot)

Vandalism and malicious mischief

Question 12

DP-2

Answer 12

Broad Form
Dwelling and other structures insured at replacement cost, personal property at actual cash value.

Covers all DP-1 perils plus additional perils:

Falling objects

Weight of snow, ice, or sleet

Accidental discharge/overflow of water

Freezing

Tearing/cracking/burning/bulging of heating/water systems

Sudden/accidental artificial current

Burglary damage (repair, not theft)

Includes Acts of Civil Authority: 2 weeks of ALE if unable to access property due to government order from a covered peril

Question 13

DP-3

Answer 13

Special Form

Dwelling and other structures insured at replacement cost, personal property at actual cash value.

Dwelling and other structures receive all-risk/open-peril coverage (covered unless specifically excluded).

Personal property is covered same perils as DP-2, not all-risk.

Most comprehensive dwelling policy available.

Question 14

Dwelling Policy Exclusions

Answer 14

Theft
Floods
Non-sudden water damage (such as ongoing leaks)
Earthquake damage
War-related damage
Losses caused by nuclear reactions
Losses caused intentionally by the insured
Losses worsened by the insured’s negligence
Losses due to demolition or seizure of property by government authorities

Question 15

Broad theft endorsements

Answer 15

For owner-occupied homes; covers theft at the dwelling and away from the dwelling.

Question 16

Limited theft endorsements

Answer 16

For non-owner-occupied dwellings; covers theft only at the insured property.