Policy Study Guide questions and verified answers

Coverage A - Dwelling Coverage B - Personal Property Coverage C - Loss of Use Coverage A - is the dwelling and dwelling extensions. The dwelling is the structure used principally as a the private residence and the dwelling extensions are other structures on the residence premises separated from the dwelling by clear space. Structures connected to the dwelling by only a fence, utility line, or similar connection are still considered to be other structures. Examples of dwelling extensions would be detached garages, fences and in-ground swimming pools. Sheds can be either Coverage A or Coverage B depending on if they are permanently to or otherwise forming part of the realty. Dwelling extensions are insured for 10% of the coverage A limit. So, if your home is insured for $100,000 then structures such as the detached garage and in-ground swimming pool would be covered for $10,000. On page 3 of the policy (1.b.) • Materials and supplies located on or adjacent to the residence premises for use in the construction, alteration or repair of the dwelling or other structures on the residence premises. Coverage B - is personal property owned or used by an insured while it is anywhere in the world. This coverage would include structures, such as sheds, not permanently attached to the realty. As a general rule items that you would take with you if you moved would be coverage B. One exception would be construction supplies. Coverage C: Additional Living Expense - provides coverage for up to 24 months when a loss insured causes the residence to become uninhabitable. Example: Apartment rent when after a hurricane causes extensive wind damage to an insured's home. Coverage C: Fair Rental Value - provides coverage for up to 12 months when you rent a portion of your home to a tenant and a loss insured causes that portion of the home to be uninhabitable. Example: You rent your garage apartment to a tenant and it sustains heavy tree damage that will cause the tenant to relocate for 2 months during the repair. Coverage C: Prohibited Use - provides additional living expense and fair rental value for a period of up to two weeks when a civil authority prohibits your use of the residence premises because of direct damage to a neighboring premise by a loss insured. Example: The civil authorities in your home town will not allow you to return to your home for 3 days because of tornado damage in the area. Open Peril - mold, fungus, or wet or dry rot; settling, cracking, shrinking, bulging or expansion of pavements, patios, foundation, walls, floors, roofs or ceilings; earth movement-landslide, earthquake sinkhole; water damage-including flood a surface water False. Coverage C - Loss of Use has 3 coverages (page 4): • Additional Living Expense • Fair Rental Value • Prohibited Use - True or False: In the FP-7955 policy, Coverage C consists of three coverages: