Chapter 3-Dwelling Policy || 100% Verified Answers.
Why was the dwelling policy developed for? correct answers To be used as a residential property
coverage form and can insure only the dwelling itself, only the contents, or both the dwelling and
the contents.
What are dwelling policies used for? correct answers To insure properties in which the owner
does not live, so a landlord insuring a rental property is an example.
What are the eligibility requirements for a dwelling policy? correct answers 1. Up to 5 roomers
or boarders;
2. Up to 4 residential units;
3. Properties in the course of construction;
4. Owner occupied, tenant occupied or both;
5. Mobile homes on the basic form only, if they contain no more than one apartment, and are
located at a permanent location listed in the policy;
6. Seasonal dwellings unoccupied for 3 or more months during a 12-month period;
7. Not designed as farm property.
What are the three coverage forms available in the dwelling property policies? correct answers
Basic (DP1), Broad (DP2), & Special (DP3)
What is the dwelling policy form structure? correct answers 1. Agreement — insuring agreement
(states that the insurer will provide coverage described in the policy in return for the premium
paid and compliance with all applicable policy provisions);
2. Definitions — limited in nature;
3. Deductible — applies to all covered losses unless noted otherwise in the policy form;
4. Coverages, including Other Coverages — define direct and indirect property coverages, and
additional coverages included in the premium charge;
5. Perils Insured Against — vary by form and is a key differentiator in form selection;
6. General Exclusions — perils not covered in all forms; and
7. Conditions — specify when coverage will apply.
What kind of peril form is the Basic (DP1) policy correct answers Named Peril
What kinds of perils are automatically covered in a Basic (DP1) policy? correct answers Fire,
lightning, and internal explosion
When would the fire peril not be covered in Basic (DP1) policy? correct answers If it is a
friendly fire, i.e. in a fire place
What are the extended perils that one can add for an additional premium to a Basic (DP1) policy
but are included in the others? correct answers 1. Windstorm
2. Hail
3. Aircraft
4. Vehicles
, 5. Riot or civil commotion
6. Explosion
7. Smoke
Remember the acronym WHARVES Is the acronym
What kind of peril form is the Broad (DP2) policy correct answers Named Peril
What are the 7 additional perils that one can add for an additional premium to a Broad (DP2)
policy and not a Basic (DP1) policy? correct answers 1. Burglars
2. Falling objects
3. Weight of snow or ice
4. Accidental discharge of water or steam
5. Tearing apart, cracking, burning, and bulging
6. Freezing
7. Artificially Generated electricity
B.B. BICE-GOLF is the acronym
True or False: The Broad (DP2) policy covers outdoor man-made objects such as fences,
awnings, piers, pools, patios, retaining walls, etc? correct answers False
True or False: The Broad (DP2) policy covers natural outdoor objects such as lawns, trees,
shrubs and plants? correct answers True
How much does Broad (DP2) policy cover up to for damage inflicted to natural outdoor objects?
A. A maximum of $1,000 and a maximum of 10%
B. A maximum of $500 and a maximum of 5%
C. A maximum of $1,000 and a maximum of 5%
D. A maximum of $500 and a maximum of 10% correct answers B. A maximum of $500 and a
maximum of 5%
True or False: The Broad (DP2) settles losses on the actual cash value (ACV) basis and the
replacement cost basis? correct answers True
The replacement cost method for the Broad (DP2) policy will cover up to what percent of the
dwelling replacement cost damage that was inflicted?
A. 20%
B. 60%
C. 40%
D. 80% correct answers D. 80%
If the property is insured for less than 80% of replacement costs under the Broad (DP2) policy,
what cost method will cover some of the damages?
A. The actual cash value (ACV) formula
B. The coinsurance formula
C. Either depending on what is the greater amount
Why was the dwelling policy developed for? correct answers To be used as a residential property
coverage form and can insure only the dwelling itself, only the contents, or both the dwelling and
the contents.
What are dwelling policies used for? correct answers To insure properties in which the owner
does not live, so a landlord insuring a rental property is an example.
What are the eligibility requirements for a dwelling policy? correct answers 1. Up to 5 roomers
or boarders;
2. Up to 4 residential units;
3. Properties in the course of construction;
4. Owner occupied, tenant occupied or both;
5. Mobile homes on the basic form only, if they contain no more than one apartment, and are
located at a permanent location listed in the policy;
6. Seasonal dwellings unoccupied for 3 or more months during a 12-month period;
7. Not designed as farm property.
What are the three coverage forms available in the dwelling property policies? correct answers
Basic (DP1), Broad (DP2), & Special (DP3)
What is the dwelling policy form structure? correct answers 1. Agreement — insuring agreement
(states that the insurer will provide coverage described in the policy in return for the premium
paid and compliance with all applicable policy provisions);
2. Definitions — limited in nature;
3. Deductible — applies to all covered losses unless noted otherwise in the policy form;
4. Coverages, including Other Coverages — define direct and indirect property coverages, and
additional coverages included in the premium charge;
5. Perils Insured Against — vary by form and is a key differentiator in form selection;
6. General Exclusions — perils not covered in all forms; and
7. Conditions — specify when coverage will apply.
What kind of peril form is the Basic (DP1) policy correct answers Named Peril
What kinds of perils are automatically covered in a Basic (DP1) policy? correct answers Fire,
lightning, and internal explosion
When would the fire peril not be covered in Basic (DP1) policy? correct answers If it is a
friendly fire, i.e. in a fire place
What are the extended perils that one can add for an additional premium to a Basic (DP1) policy
but are included in the others? correct answers 1. Windstorm
2. Hail
3. Aircraft
4. Vehicles
, 5. Riot or civil commotion
6. Explosion
7. Smoke
Remember the acronym WHARVES Is the acronym
What kind of peril form is the Broad (DP2) policy correct answers Named Peril
What are the 7 additional perils that one can add for an additional premium to a Broad (DP2)
policy and not a Basic (DP1) policy? correct answers 1. Burglars
2. Falling objects
3. Weight of snow or ice
4. Accidental discharge of water or steam
5. Tearing apart, cracking, burning, and bulging
6. Freezing
7. Artificially Generated electricity
B.B. BICE-GOLF is the acronym
True or False: The Broad (DP2) policy covers outdoor man-made objects such as fences,
awnings, piers, pools, patios, retaining walls, etc? correct answers False
True or False: The Broad (DP2) policy covers natural outdoor objects such as lawns, trees,
shrubs and plants? correct answers True
How much does Broad (DP2) policy cover up to for damage inflicted to natural outdoor objects?
A. A maximum of $1,000 and a maximum of 10%
B. A maximum of $500 and a maximum of 5%
C. A maximum of $1,000 and a maximum of 5%
D. A maximum of $500 and a maximum of 10% correct answers B. A maximum of $500 and a
maximum of 5%
True or False: The Broad (DP2) settles losses on the actual cash value (ACV) basis and the
replacement cost basis? correct answers True
The replacement cost method for the Broad (DP2) policy will cover up to what percent of the
dwelling replacement cost damage that was inflicted?
A. 20%
B. 60%
C. 40%
D. 80% correct answers D. 80%
If the property is insured for less than 80% of replacement costs under the Broad (DP2) policy,
what cost method will cover some of the damages?
A. The actual cash value (ACV) formula
B. The coinsurance formula
C. Either depending on what is the greater amount
