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Dwelling Insurance
Arizona Independent Insurance Adjusters Exam
| Question | Answer |
|---|---|
| _______ ______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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