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Dwelling Fire Policy
Ga P & C Insurance Exam- Dwelling Fire Policy
| Question | Answer |
|---|---|
| What are four reasons a home could not qualify for homeowner's policy? | 1. low value 2. old structure not renovated 3. undesirable location 4. rental house (no exceptions) |
| What are the first 3 sections of a dwelling fire policy? | 1. Decl page 2. Coverages 3. Other coverages |
| What distinguishes a residence from a commercial residential structure? | residence has 4 or less family units |
| What must a mobile home have to be a residence? | permanent location with perm address (no wheels) |
| Is a house on a farm a residence? What type of policy covers losses to a farm house? | No; Farm Owner's Policy |
| Can a house with an office be a residence? | Only if residence dominates square footage of structure |
| Which insured is qualified to make changes to a dwelling policy? | Named insured and spouse only if he/ she resides in same household |
| Are named insured's contents always covered under a dwelling policy? | No- only if he / she resides in the dwelling |
| Are a spouse and family member's contents always covered under a dwelling policy? | No- only if they reside with named insured in dwelling |
| Are roomates' contents covered under a dwelling policy? | Never (no insurable interest) |
| What is the geographic limit for a named insured's coverage on loss of contents under a dwelling policy? | worldwide |
| Is a college student's contents in a dorm room covered under his / her parents' dwelling policy? | only if student is < 24 yo and a full time student |
| What must be attached to a dwelling fire policy's decl page? What is its purpose? | dwelling form; to insure a residence |
| List the three types of dwelling forms in order of worst to best and show reasoning. | 1. Basic = DP1 (least named perils) 2. Broad = DP2 (more named perils) 3. Special = DP3 (all risk) |
| What are the 5 major coverages under a dwelling policy? | A. Dwelling B. Other Structures C. Pers. Property D. Rental Value E. Additional Living Exp. (DOPRA) |
| Does coverage A- Dwelling cover damages to a garage or deck? | Yes |
| What determines if lights, etc of a dwelling are covered under coverage A- Dwelling or under coverage C- Pers. Property? | If lights etc are attached / mounted permanently to house then they are covered under A- Dwelling (i.e. carpet, light fixtures etc) |
| Under coverage A- Dwelling, how are loss payments calculated for DP1? DP2? DP3? | DP1 uses ACV and DP2/DP3 use replacement value (determined by ins co) |
| Under coverage B- Other Structures, what defines an other structure? | structure on same premises but separated by clear space (i.e. sep. garage, pool, util building, etc) |
| If no limit is set for cov. B- Other Structures at time of signing, then what is the limit? | 10% cov. A limit |
| If more than one "other structure" is lost in one accident covered by a dwelling policy, then is the loss paid per building (max limit for each structure) or per occurrence (aggregate limit for all other structures)? | per occurrence (limit applies to all aggregated since all lost in one incidence) |
| Under a dwelling policy's cov. C- Pers. Property, how is the limit determined? Is it an automatic % of Cov A if not set that way? | declared by insured in appl; No |
| 1. What determines the actual amt paid to insured in case of loss covered under Cov. C- Pers. Property? 2. With what payment method are losses handled under cov C (all forms)? | 1. inventory submitted by insured at time of claim processing 2. ACV |
| Under a dwelling's cov. D - Rental Income, what must happen for loss of rental income to be covered? | There must be a covered property loss that caused the loss of rental income (i.e. lightning striking house) |
| How is the limit for cov D- Rental Income determined for a dwelling policy? | set at appl. or if not then automatically 10% Cov A |
| Define additional living expenses w/ respect to cover. E of a dwelling policy. | temporary living exp over and above normal living exp and only when caused by a covered loss (i.e hotel, meals out) |
| Would mortgage payments be eligible for coverage under Cov. E- Additional Living Exp? | No (regular expenses not covered) |
| Who does ins. co pay for reimbursement of additional living exp? | pays directly to merchants (i.e hotel etc) |
| If no limit is set for cov. E- Additional Living Exp at time of signing, then what is the limit? | 10% Cov. A |
| Is cov. E- Additional Living Exp available for all dwelling policies without an endorsement? | No- only policies with dwelling forms DP2- Broad and DP-3 Special |
| What perils are always covered under a dwelling policy with DP1- Basic form? | only fire, lightning and internal explosion |
| Can the three named perils list be expanded upon to include more perils covered? If so, How? | Yes - with an Extended Coverage Perils Form (EC Form) |
| What additional perils can be added to coverage on a DP1- Basic dwelling form? | 1. Wind 2. Hail 3. Aircraft 4. Vehicle 5. External Explosion 6. Smoke 7. Civil Commotion 8. Riot (W HAVES CR) |
| What distinguishes a civil commotion from a riot? | A civil commotion occurs when a celebration gets out of hand. A riot occurs when 3 or more angry people intend to do damage to property (i.e. looting) |
| What distinguishes vandalism/ malicious mischief from a riot? | vandalism is <3 people who damage property without reason; riot occurs when 3 or more angry people intend to do damage to property (i.e. looting) |
| Can vandalism / malicious mischief be covered under a Basic DP1 dwelling form? If so, How? | Yes; attach a Vandalism / Malicious Mischief Form |
| Can cov. E- Additional Living Exp ever be covered with a basic DP1- dwelling form? | Yes, but only with an endorsement |
| What is the chief difference between the DP1- Basic and DP2- Broad dwelling forms? | DP2 covers all named perils covered by DP1 + automatic coverage for some perils that must be endorsed with DP1 and some perils that are not available at all with DP1- Basic. |
| What is the difference between a sudden discharge of water and a flood? | A flood is a rapid rise in SURFACE H2O |
| Is the DP3- Special dwelling form named peril or all risk coverage? | All risk |
| What is the chief dif between the DP2- Broad and DP3- Special dwelling forms? | pers prop coverage: theft covered with DP-3 w/ endorsement but only damage from burglar covered on DP-2 |
| What are the 2 types of theft of Contents Endorsements available with a DP-3? | 1. Broad Theft Endorsement (Owner on premises' contents only) 2. Limited Theft Endorsement (Landlord on premises' property only) |
| Is damage from termites covered under a DP-3 Special Form? | No; Must purchase a Termite Bond (not part of policy) |
| Under the section "Other Coverages" of a dwelling policy, What does removal coverage refer to and What is the length of coverage for each dwelling form? | removal coverage applies to insured's contents that have been moved to a new location after suffering a loss at dwelling (i.e. fire); 5 days for DP1 and 30 days for DP2/ DP3 |
| Under the section "Other Coverages" of a dwelling policy, what does debris removal coverage refer to and what is the limit? | debris left on premises after a loss; 5% Cov. A |
| Under the section "Other Coverages" of a dwelling policy, what is the limit on worldwide personal property coverage? | max 10% Cov. A |
| Under the section "Other Coverages" of a dwelling policy, what types of communities need Fire Dept Service Charges coverage? What is the limit and deductible? | small towns with volunteer fire dept; max $500 / NO deductible |
| Under the section "Other Coverages" of a dwelling policy, which dwelling forms are covered by Lawns, Trees, Plants & Shrubs coverage? | only DP2 and DP3 |
| What is the max limit to be paid for a loss of one tree under DP2/ DP3? For more than one tree? | $500; max 5% Cov. A |
| Are wind-damaged trees covered under section "Other Coverages" of a dwelling policy? Lightning damaged trees? | No; Yes |
| Which fire dwelling policy is All Risk? Which has the most named perils? | DP3; DP2 |
| For the A- Dwelling Coverage section of a dwelling fire policy, which dwelling forms pay losses via ACV and which via replacement cost? | DP1 uses ACV and DP2 and DP3 use replacement cost if insured a min. 80% of value |
| If a dwelling suffers a loss and is covered for < 80% value, then how are loss payments calculated? | Pay largest amt among the ACV and coinsurance limits |
| For the C- Personal Property section of a dwelling fire policy, which dwelling forms pay losses via ACV and which via replacement cost? | All pay via ACV |
| What is the only catastrophic loss that can be endorsed on dwelling forms (all three)? | Earthquake Endorsement |
| Do dwelling forms include liability coverage as a main coverage? | No, but can be endorsed with Personal Liability Endorsement (Premises Liab. End. for landlord) |
| What are the two main sections of a Personal Liability Endorsement? | 1. Cov. L- Personal Liability 2. Cov. M- Medical Payments to Others |
| What types of pers liab damages are covered with a Pers. Liability Endorsement and what is required on part of the insured? | Only covers bodily injuries and pers. prop. losses to 3rd parties and only when insured is at fault / negligent. |
| What types of damages are covered with a Dwelling policy's coverage M- Med Payments to Others? Is the insured required to be negligent? | Treatment for injuries within 3 yrs of accident on premises involving invited guests and employees (NOT roommates, tenants); no negligence required |
| What is the deferred limit to Cov. M- Med Payments to others and can it be raised? | $1k per person, per occurrence; Yes- at signing with higher premium |
Created by:
jkbick
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