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Dwelling Insurance

Arizona Independent Insurance Adjusters Exam

_______ ______is offered under what’s called the Dwelling Program. Dwelling Insurance
designed for insuring residential structures that are not eligible for a homeowners policy. Dwelling Insurance
A _____ ______is the most basic property insurance policy available. Dwelling policy
A basic dwelling policy is a _______insurance policy (does not include liability coverage or medical payments except by endorsement) property-only
The Dwelling program does not require the structure to be ________. owner-occupied
Eligibility for the Dwelling policy is as follows: - single family homes • 1-4 family dwellings (including duplexes, 4-plexes, etc. • dwellings under construction • max 5 boarders are allowed in a DP-insured dwelling • permanently installed mobile homes are OK • incidental business risks only
Dwelling policies can be held by ______, but also by entities such as corporations, partnerships, etc. individuals
Homeowners insurance, on the other hand, requires that the insured must be a ______ _____. private party
_______ _____ are not eligible for a dwelling policy. Farm properties
Properties that would require a dwelling policy because they do not qualify for a homeowner’s policy are: a) 1-4 family dwellings rented to others b) some older homes c) most mobile homes d) homes with values under a certain threshold e) properties with low mortgage balances f) hunting cabins, bunkers
There are three different policies under the Dwelling Program: DP-1 Basic form (cheapest and least coverage) • DP-2 Broad Form • DP-3 Special Form (most expensive and broadest coverage)
This policy provides very basic coverage for direct physical loss. It’s a “named peril” policy, and only covers loss by one of three perils: fire, lightning and internal explosion. DP-1 “BASIC FORM”
A DP-1 is a _______ _______ policy. named peril
DP-1 covers: fire, lightning and internal explosion.
For Fire loss to be covered, it must be: Vandalism and Malicious Mischief (VMM) covers only intentional acts, does not include losses caused by burglary or theft, and does not cover “vacant” houses.
______means houses that have no contents or permanent residents for 60 days. “vacant”
Internal Explosion loss does not include: a) loss due to explosions that occur outside of the covered building b) Burst water pipes c) electrical arcing d) rupture of pressure-relief devices e) loss due 2explosions of steam boilers or steam pipes owned leased or operated by the named insured
Many insureds who hold a DP-1 policy add two endorsements at an additional cost;________ and _______ Extended Coverage (EC) and Vandalism & Malicious Mischief (VMM)
Extended Coverage adds the following perils: a) Windstorm(hurricane, tornado) b) Civil commotion c) Smoke d) Hail e) Aircraft(plane hits the house) f) Vehicles(if a car swerves off the road and hits the house) g) Volcanic eruption h) Explosion (includes external explosion) i) Riot
WC SHAVVER a) Windstorm(hurricane, tornado) b) Civil commotion c) Smoke d) Hail e) Aircraft(plane hits the house) f) Vehicles(if a car swerves off the road and hits the house) g) Volcanic eruption h) Explosion (includes external explosion) i) Riot
The ____ ______is very similar to the DP-1; it just covers more perils. Broad Form (DP-2)
the ____ automatically includes all of the Extended Coverage (EC) and Vandalism & Malicious Mischief perils: DP-2
Under DP-2 extended coverage there’s ___ ______for interior damage unless the wind first damages the exterior, thereby letting water in, that then causes the damage. no coverage
Under a DP-2 extended coverage ensuing earthquake is ____ ____(an earthquake endorsement would be needed for damaged caused by earth movement by volcanic eruption) • multiple eruptions within 72 hours are considered “one eruption” for claim purposes not covered
The DP-2 also covers: weight of ice, snow & sleet burglary damage glass breakage freezing of pipes Electrical damage falling objects sudden and accidental tearing apart, cracking burning orbulging accidental discharge Collapse
Gives “open perils” coverage for the dwelling and all structures on the property. DP-3 SPECIAL FORM
Although the DP-3 covers structures on an open perils basis, personal property (i.e. contents) is still covered on a ___ ___ basis (the named perils covered are the same as the DP-2; fire, lightning, EC, VMM, etc.) named peril
The dwelling policy is made up of the following sections: a) Coverages b) Perils Insured Against c) General Exclusions d) Conditions
This is coverage for the principle structure on the property; the one described on the declarations page. Coverage A includes any structures attached to the dwelling; e.g. attached garages and lean-tos. Coverage A- Dwelling
Coverage A Dwelling includes equipment used to service the dwelling, such as the ____ ___, water softener or the heating oil tank. A/C compressor
_____ _____is coverage for detached structures on the premises. These are structures that are physically separated from the dwelling by clear space. (detached garages, detached gazebos, detached sheds, fencing, stand-alone mailboxes, lamp-posts) Coverage B (“Other Structures”)
There is only __% of the dwelling coverage allotted to Other Structures. For example, if the insured has a Dwelling Policy with $100,000 coverage for the dwelling, there is only $10,000 coverage for any/all losses to Other Structures (per claim). 10%
Under the DP-2 and DP-3, this 10% is in addition to the Dwelling limit of liability. Under the DP-1, the 10% is ______ in the dwelling limit of liability. included
____ ______is not coverage for buildings; this is coverage for the insured’s belongings.It is optional, not automatic. Coverage C – Personal Property (also called “Contents”)
Property coverage under a dwelling policy is based on _____ _____ _____, not replacement cost. Actual Cash Value
Coverage C covers the personal property of the ______, not personal property of tenants. Insured
Under Coverage C, ___ and ____ are covered, but only while on the premises. rowboats and canoes
Coverage A, B and C (above) are examples of “___ ____”. ___ ____is physical loss to tangible property. Direct Loss
The dwelling policy also covers “___ ___” – ___ ____is an economic loss that is intangible. indirect loss
This coverage pays the insured for lost rental revenue. It pays when, for example, the insured’s rental property is damaged and a tenant has to move out and is therefore no longer paying rent. Coverage D- Fair Rental Value
Under Coverage D If the reason for the loss of rental value is an order by a civil authority (such as a mandatory evacuation), the insured can receive up to ___ ____of compensation maximum. Two Weeks
This coverage pays for additional living expenses incurred by the insured (not the tenant). Coverage E – Additional Living Expense
This is coverage for removal of debris. Important notes: a) A peril insured against must cause the loss. b) It covers debris of covered property. Debris Removal
This is coverage for temporary repairs made/necessary measures taken solely to protect the property from further damage after a covered peril. Reasonable Repairs
this gives an additional 10% of coverage A for increased costs of repair due to the enforcement of any law or code that regulates construction, remodeling, etc. Ordinance or Law
Notes about Ordinance or Law: this is only in the DP-2 and DP-3! – no Ordinance or Law coverage on the ____ DP-1
pays up to $500 if the fire department is called to protect property from a peril insured against. Fire Department Service Charge
the value of damaged trees, shrubs and plants are covered up to a maximum of 5% of Coverage A, and a maximum of $500 for any one tree, shrub or plant, when damaged by a covered peril.windstorm and hail loss to trees, shrubs, etc. is not covered Trees, Shrubs and Other Plants
there’s an additional 10% in addition to the coverage C limits for improvements the insured makes at his/her expense to the dwelling (if he/she is a tenant). Improvements, alterations and Additions
War and Nuclear Hazard b) Flood c) Water back-up from sewers or drains d) Water e) Earthquake, landslide, sinkhole f) Power failure off the premises. g) Neglect and intentional loss General exclusions under the dwelling program
The ___ _____lays out some very important details, such as the duties of the insured and the insurer after a loss, how losses are settled, how mortgage companies factor into a loss settlement, etc. Conditions section
This is about the requirement that the insured must be in a position to suffer an economic loss if an insured item were damaged. Insurable interest
this section specifies how the Dwelling policy will interact with the other policy; the Dwelling policy will only pay the percentage of the loss that it’s limit bears to the total limits of all policies covering the loss. Other insurance
The insurance company is only obligated to pay on a claim if the insured “follows the rules” after a loss. The conditions section lays out exactly what these “rules” – more precisely duties - are. Insured’s Duties after Loss
important duties of the insured after a loss: a. Give prompt notice, must file a claim within a reasonable timeframe b. Protect property against more damage c. Keep records of expenses d. Cooperate with investigation e. Show damaged property to the insurer f. Compile a detailed list of damage
If an insurer requests a proof of loss form the insured has ___ days to comply. 60
The _____ ______says that any changes that broaden coverage on the edition of the policy that the insured holds will automatically apply without additional premiums. Liberalization Clause
If an insured intentionally conceals or misrepresents facts, the policy is voided and no coverage is given. Concealment, Fraud or Misrepresentation
Buildings and Other Structures (Coverage A and B) is settled at _____ ______. Replacement Cost
the insurance company will only pay the Actual Cash Value of the loss until they receive _____ that the repairs have been completed. Proof
This endorsement gives the same coverage as the Liability portion of a homeowners' policy. Note – this can be added as an endorsement, or purchased as a “stand-alone” policy. Personal Liability Endorsement
because the dwelling policies do not cover ____, this is a popular endorsement. Theft Endorsement
Two types of theft coverage: a) Limited Theft Coverage – covers property stolen from the insured premises b) Broad Theft Coverage – covers for property that’s stolen either on or off the premises
___ ___ ___covers a dwelling or building under Coverage A while it’s being built. Insured must advise the insurer when construction is complete for an adjustment of premium. Occupancy is permitted for 30 days after completion. Dwelling Under Construction
for an additional premium, this endorsement annually increases coverage A by 4%, 6% or 8%. Automatic Increase Endorsement
if the insured recovers property that’s been paid for by the insurer after a claim, the insured must notify the insurer, and the claim will be adjusted accordingly. Recovered Property
A stand-alone lamp post in the front yard would be considered: Coverage B
A windstorm causes damage on a property covered by a DP-2 form. There is downed fencing, some furniture in the dwelling is water stained, and a cloth awning is blown away. What, if anything, is covered? The Fencing Only
Richard Ramsey's house is covered under a DP-1 policy with a $100,000 Coverage A limit of liability. A fire destroys the dwelling and a $30,000 detached mother-in-law building. How much can Mr. Ramsey recover from the insurance company? $100,000
An insured has a DP-2 with $100,000 limit of liability. She loses five trees during a hailstorm. Each tree is worth $250. How much can she receive if she makes a claim? $0
A detached garage would be considered: Coverage B
Which type of Personal Property IS covered under Coverage C -- Personal Property? computers and electronics
How much flood coverage is available under a Dwelling policy? $0
Created by: ajramirez1969
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