Unit 6: Dwelling

Question 1

What is a Dwelling? (Think landlord)

Answer 1

Dwelling insurance policies should not be confused with homeowners policies. They are two different products. Dwelling insurance does not require the building to be owner occupied and usually covers risks that may not qualify for homeowners insurance like rental property, older homes, and hunting cabins in rural areas. The dwelling policy does not automatically cover the peril of theft or personal liability. These can be added by endorsement.

Dwelling
• Unique from homeowners policy
•Not required to be owner occupied
•Covers risks like rental property, older homes, and hunting

This unit will focus on the three dwelling policy forms: DP-1 (the Basic Form), DP-2 (the Broad Form), and DP-3 (the Special Form). Dwelling policies are called monoline policies because they insure only property.

Question 2

What is eligibility for a dwelling?

Answer 2

Dwelling policies may be used to insure any of the following:

• Vacation homes
• Rental property
• Dwellings with four units in which each unit may accommodate occupants (i.e., boarders)
• Dwellings under construction
• Mobile homes meeting certain qualifications, including that they are permanently located

Farm dwellings are not eligible for coverage.

Question 3

Dwelling Policy Eligibility

Answer 3

Dwelling Policy Eligibility
• 1-4 unit dwelling with boarders
• Vacation dwellings
• Rental dwellings
• Dwellings under construction (endorsement)
• Mobile homes (endorsement)
• Farm dwellings NOT eligible

Question 4

Property Coverages for Dwellings

Answer 4

The dwelling policies can provide the following coverages for the named insured:

• Coverage A-dwelling
• Coverage B–other structures [detached from the main dwelling (also referred to as appurtenant structures)
• Coverage C-insured’s personal property
• Coverage D-fair rental value

Question 5

Explain property coverages for dwellings

Answer 5

Coverage A-dwelling covers the dwelling, structures attached to the dwelling (such as an attached garage or carport), and materials and supplies for use in the construction or repair of the dwelling, or
other structures at the location.

Coverage B-other (detached) structures insures buildings on the premises that are separated from the dwelling by a clear space or connected only by a fence, utility line, or similar connection. The building may not be used for commercial, manufacturing, or farming purposes.

Coverage C-personal property covers the insured’s personal property that is at the described location and is usual to the dwelling occupancy. Personal property belonging to the insured’s guests or servants may be covered at the insured’s request. If the property is a rental property, a tenant’s property is not covered.

The following items of personal property are also not covered:
• Animals, birds, and fish
• Aircraft
• Motor vehicles, other than motorized equipment used to maintain the premises
• Boats, other than rowboats and canoes
• Accounts, bills, currency, evidence of debt, money, and securities

Question 6

Coverages continued

Answer 6

Coverage is also available for personal property not at the premises that is limited to 10% of the Coverage C amount purchased. You may use this 10% limit for loss by an insured peril covered under Coverage C while anywhere in the world. This coverage does not apply to property of guests or
servants, tenants, or to rowboats or canoes.

Coverage D-fair rental value covers the insured in the event a covered loss makes the rental portion of a property unfit for normal use. Twenty percent (20%) of the insurance on the dwelling is available for this coverage. If a civil authority prohibits use of the insured property because of a covered peril damaged at a neighboring location, payments are limited to a maximum of two weeks.
Coverage E-additional living expense is induded in DP-2 and DP-3 and pays for additional living expenses the insured incurs after a covered loss, including reasonable motel, dining, laundry, and transportation expenses. The limit is 10% of Coverage A and applies when the insured occupies the premises. These additional expenses are covered for the time period needed to repair or replace the damaged property or for the insured to move to another permanent location. If a civil authority prohibits use of the insured property because a covered peril damaged a neighboring location, payments are limited to a maximum of two weeks. (Note that this coverage can be added to the DP-1 by
endorsement.

Question 7

Dwelling Coverage summary

Answer 7

Dwelling Property Coverages
• A-dwelling
• B-other structures (10% of
Coverage A)
• C-personal property (on premises)
•Off premises covered up to 10% of Coverage C
• D-fair rental value
• E–additional living expense
• Coverage E is induded with
DP-2 and DP-3. It can be added to DP-1 by endorsement.

Question 8

Other coverages DP 1(BASIC FORM)

Answer 8

The dwelling Basic Form provides certain other coverages that are automatically included for no
additional premium.

• Other structures allows use of up to 10% of the Coverage A limit of liability for covered losses to other structures as described in Coverage B.
•Debris removal pays for the expense of removing debris as a result of a loss that is covered by the policy.
• Property removed covers loss to property that occurs while the property is being removed to protect it from a covered peril. In the Basic Form, property removed is covered for 5 days. For example, the roof has a big hole in it because of a windstorm and the insured moves personal property away from the premises to a storage building for protection.
•Reasonable repairs pays for the reasonable costs to make necessary repairs to protect property from further damage following a covered loss. For example, the cost to temporarily fix the big hole in the roof is considered a reasonable repair. Remember, protecting property from further loss is a condition of coverage and is the responsibility of the insured after a loss has occurred.
• Improvements, alterations, and additions provide coverage for insureds who are tenants for improvements or alterations made to the dwelling at the tenant’s expense. For example, the renter pays for new carpet in the rental house. Up to 10% of the Coverage C limit is available.

Question 9

DP 1 continued

Answer 9

•Fire department service charge pays up to $500 for fire department charges incurred when the fire department is called to save or protect covered property from a covered peril. No deductible applies to this coverage.
• Worldwide coverage provides 10% of the Coverage C limit for covered personal property while it is located anywhere in the world.
• Rental value provides up to 20% of the Coverage A limit of liability for loss of fair rental value.

With the Basic policy, any amount that is paid out will reduce the limit of liability for Coverage A as well.

Other Coverage (Automatically
Included)
• Debris removal
• Property removed-5 days
• Reasonable repairs
• Tenant’s improvements (10% of
Coverage C)
• Fire department service charge-$500 (no deductible)
• Worldwide personal property
(10% of Coverage C)

Question 10

Other Coverages DP-2(BROAD FORM) & DP-3(SPECIAL/OPEN FORM)

Answer 10

DP-2 and DP-3 include all of the other coverages in DP-1 plus some other coverages that are not found in DP-1. These other coverages are a part of a DP-2 and a DP-3 policy, and no additional premium is required.

Trees, shrubs, and other plants pays up to 5% of the Coverage A limit for damage to trees, shrubs, plants, or lawns caused by a specified list of perils. The policy will not pay more than $500 for damage to any one tree, shrub, or plant.

Collapse pays for the collapse of the dwelling caused by a specified list of perils. To be considered a collapse, the loss must involve the building or part of the building abruptly falling down or caving in, after which the building or part of the building cannot be occupied. Collapse that results from hidden decay or hidden insect or vermin damage is not covered if the insured knew about the damage before the building collapsed.

Glass or safety glazing material pays for the breakage of glass or satety glazing material and damage to covered property caused by glass breakage.

Ordinance or law coverage allows payment of up to 10% of the Coverage A limit of liability for the increased cost to repair or rebuild a dwelling or other structure to conform to applicable building and land use codes.

In DP-2 and DP-3, property removed from the premises to protect from damage is covered for 30 days.

In DP-1, it is covered for only 5 days.

Question 11

Coverage DP 2 & DP 3 summary (BROAD FORM & SPECIAL/OPEN FORM)

Answer 11

Other Coverages: DP-2 and DP-3
• All basic other coverages
• Trees, shrubs, and plants
• Maximum of $500 each
• Total-5% of Coverage A
• Collapse-caused by a covered
peril
• Glass
• Ordinance or law (10% of
Coverage A)
•Property removed-30 days (5 days DP-1)

Question 12

What is replacement cost coverage?

Answer 12

DP-1 pays all losses on an actual cash value basis (replacement cost - depreciation). However, DP-2 and DP-3 pay losses to the dwelling and other structures on a replacement cost basis, with no deduction for depreciation. Insureds must cover their buildings with insurance equal to 80% or more of the full replacement cost at the time of the loss. As a review, an insured can never receive more than the policy limit.

Claim Values
• Personal property-ACV
Dwelling (DP-2 and DP-3)-
replacement

Question 13

DP 1(BASIC FORM COVERAGE)

Answer 13

The following are the only perils that are automatically covered by DP-1.

•Fire only covers damage from an unfriendly fire. Damage from a friendly fire (fireplace) is not
covered.
• Lightning is natural electricity.
• Internal explosion includes the explosion of a furnace, stove, or hot water heater inside the dwelling.

Question 14

Extended Coverage Perils under DP 1

Answer 14

Extended coverage (EC) perils are not automatically included in a dwelling policy. They can be added for an additional premium.
• Wind
• Civil Commotion
• Smoke
“ Hail
• Aircraft
• Yehicles
• Yolcanic Eruption
• Explosion
• Riot

The explosion peril in the extended coverage perils replaces the internal explosion peril that is automatically part of every dwelling policy. The explosion peril encompasses both internal explosions and other types of explosions, such as an explosion at a neighboring location.

Damage to the interior of a building from a windstorm or hail is only covered if wind or hail first makes an opening that allows these elements to enter the building. Awnings, signs, and antennas outside a building are not covered against wind or hail damage.
The vehicles peril does not apply to damage caused by a vehicle owned or operated by the insured or a resident of the insured’s household. It also does not include vehicle damage to fences, driveways, and walks

Smoke damage from fireplaces is not covered.

The insured can also obtain coverage for vandalism and malicious mischief (V&MM) by paying an additional premium and indicating this coverage in the declarations. This coverage must be purchased.

Question 15

Extended Coverage Perils under DP 1(continued)

Answer 15

in conjunction with the extended coverage perils.

Vandalism and malicious mischief coverage does
not cover:
•damage to glass or safety glazing materials constituting a part of a building other than glass building blocks;
• losses by theft, larceny, or burglary (but does apply to building damage caused by burglars); and
• vandalism to a building that has been vacant for more than 60 consecutive days. (A building being constructed is not considered vacant.)
If the insured purchases the EC perils of WCSHAVER and the perils of V&MM, the insured now has basic peril coverage.

DP-1
• Only insures fire, lightning, and internal explosion automatically
•EC-WCSHAVVER for additional premium
• V&MM-In addition to EC for additional premium

Question 16

Covered Perils–Broad Form

Answer 16

Broad form coverage is more expansive than basic form coverage. It includes coverage for all the perils included in a basic form policy plus several additional perils that are expressly named. Like with a basic form policy, a Broad Form policy covers only named perils. Again, if a peril is not specifically named in the policy, that peril is excluded. Fortunately, the broad form is designed to cover the most common forms of property damage.

The Broad Form automatically covers fire, lightning, internal explosion, the extended coverage perils (WCSHAVVER), and vandalism and malicious mischief. It broadens some perils covered under the Basic Form and adds the following perils, remembered using the acronym BIG AFFECT:
•B-Burglary damage
• I- Ice, sleet, and snow (weight of)
• G-Glass breakage
•A-Accidental discharge of water–accidental discharge of water or steam at the described location from within a plumbing, heating, air-conditioning, or automatic fire protective sprinkler system or household appliance
•F- Freezing objects-freezing of plumbing, heating, air-conditioning, or automatic fire protective sprinkler systems and household appliances (insured must use reasonable care to maintain heat in the building or shut off the water supply and drain all systems and appliances)
•F-Falling objects
•E-Electrical current–sudden and artificially generated electrical current (does not include damage to a tube, transistor, or similar electrical component)
• C- Collapse
• T-Tearing asunder-sudden and accidental tearing apart, cracking, or burning of steam or hot-water heating, air-conditioning, or automatic fire protective sprinkler system and water heaters

Note the following exceptions from the Broad Form dwelling policy.

Question 17

Covered Perils–Broad Form continued

Answer 17

The weight of ice, snow, or sleet peril does not cover damage to awnings, fences, patios, pavement, swimming pools, foundations, retaining walls, bulkheads, piers, wharves, or docks.

The falling objects peril does not include damage to awnings, fences, outdoor equipment, or outdoor radio and television antennas, including their lead-in wires, masts, and towers.

Damage to a building interior or its contents is covered only if the falling object first damages the roof
or an exterior wall.

The accidental discharge or overflow peril does not include continuous or repeated leakage or seepage, freezing, or damage to the system or appliance itself.

The burglar damage and accidental discharge perils are not covered if the building has been vacant for
more than 60 consecutive days.
• The vehicles peril covers damage to fences, driveways, and walks when the vehide is driven by someone who is not a resident of the insured’s household. It also covers damage to other types of property when the vehicle is driven by an insured or a resident of the insured’s household.
• The smoke peril includes loss caused by fireplace smoke.

Question 18

DP 2 Broad Coverage

Answer 18

DP-2 Broad
• All of DP-1 available perils (fire, lightning, internal explosion,
WCSHAVVER and V&MM)
• Plus BIG AFFECT
• B- Burglary damage
• I- Ice, sleet, and snow (weight of)
• G-Glass breakage
• A-Accidental discharge of
• F- Freezing objects
• F- Falling objects
• E–Electrical current
• C-Collapse
• T- Tearing asunder

Question 19

Broad Coverage Exclusion

Answer 19

DP-2 Broad Exclusions
• Weight of ice, snow, or talling objects on awnings, fences, patios, swimming pools, docks, and retaining walls
• Accidental discharge of water from continuous leaking
• Flood
• Burglary if property vacant >
60 consecutive days

Question 20

Covered Perils- Special Form

Answer 20

Special Form coverage (DP-3) is the most inclusive of the three options. The trick with Special Form policies is that they should be read differently from how you would read a Basic or Broad Form policy.
In a Special Form policy, instead of the document listing what’s covered, risks of direct physical loss are covered except for the exclusions specifically enumerated in the policy. In this sense, reading a Special Form policy is the opposite of reading a Basic or Broad Form policy. Risks of direct physical loss are covered perils.
The Special Form provides open peril coverage on the dwelling and other structures, insuring against risks of direct physical loss that are not specifically excluded in the policy. Personal property is covered on a named broad peril basis -the same perils listed in DP-2.

Question 21

Covered Perils -Special(Open) Coverage

Answer 21

Under Coverages A and B, the Special Form excludes:
•any loss involving collapse, other than as provided in the other coverages section;
• freezing of plumbing, heating, air conditioning, automatic fire protective sprinkler system, or a household appliance, or overflow due to freezing unless reasonable care was taken to maintain heat in the building or to shut off the water supply and drain the systems and appliances;
• freezing, thawing, pressure, or weight of water or ice to fences, pavement, patios, swimming pools, foundations, retaining walls, bulkheads, piers, wharves, or docks;
• theft in or to a dwelling or structure under construction, or theft of any property that is not part of a covered building or structure;
•damage by wind, hail, ice, snow, or sleet to outdoor radio and television antennas and aerials, including their leadin wires, masts, or towers, and damage by these same perils to lawns, trees, shrubs, or plants;
* vandalism, malicious mischief, theft, and attempted theft if the dwelling has been vacant for more than 60 consecutive days at the time of loss;
•constant or repeated seepage or leakage of water or steam over time from a plumbing, heating, air conditioning, or fire protective sprinkler system or from a household appliance;

Question 22

Continued

Answer 22

• gradual and expected losses, such as wear and tear, deterioration, inherent vice, latent defect, mechanical breakdown, smog, rust, corrosion, mold, wet or dry rot, and smoke from agricultural smudging or industrial operations;
• discharge, dispersal, seepage, migration, release, or escape of pollutants such as smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste;
• settling, shrinking, bulging, or expansion, including resulting crackingof pavements, foundations,
walls. floors. roots. or ceilings: and
, loss caused by birds, vermin, insects, and domestic animals.
If a loss that is not otherwise excluded involves water damage from a plumbing, heating, air conditioning, or fire protective sprinkler system or household appliance, the policy covers the loss caused by water and the cost oftearing out and replacing any part of a building necessary to repair the system or appliance. Loss to the system or appliance itself is not covered.

DP-3-Special
• Open perils–dwelling and
other strictures
Risks of direct physical loss are covered
• Broad perils-personal property
Excluded Perils
• Intentional damage
• Theft
• Freezing of plumbing (if
unoccupied and care not taken)
Wear and tear
• Foundations

Question 23

General Exclusions

Answer 23

All dwelling policies exclude the following:

• Losses resulting from ordinances or laws that require the insured to test for, monitor, clean up or otherwise respond to pollutants or that require more elaborate or expensive reconstruction or demolition than was used in the original structure (Replacing a dwelling’s regular glass with safety glass is covered.)
• Losses resulting from earth movement, including earthquake, mudslides, sinkholes, and subsidence; does not apply to direct loss by fire or explosion resulting from earth movement
• Water damage in general, including flooding, water backing up into a building, and water leaking or seeping from below the ground; also excluded is water or waterborne material that is discharged from a sump pump or related equipment
• Losses due to power interruption that occurs away from the insured location
• The insureds failure to save and preserve property after a loss, or to protect it from loss
• war
• Nuclear hazard
• Losses caused by the insured or by someone else at the insureds direction
• Destruction, confiscation, or seizure of property by the government or a public authority

Question 24

General Exclusion summary

Answer 24

General Exclusions in All Dwelling
Policies
• Ordinance or law
Earthquake
•Flood
• War
• Nuclear
• Intentional losses
• Government seizure

Question 25

What are Loss Valuations

Answer 25

Loss Valuations
• Loss settlement
• Our option
• Deductible
• Pair or set
• Loss payment
• Other insurance
• Recovered property

Question 26

How are Loss Valuations and Dwellings Valued

Answer 26

Dwellings, other structures
DP 1: ACV
DP 2: Replacement
DP 3: Replacement

Personal Property
DP 1: ACV
DP 2: ACV
DP 3: ACV
*ACV= Actual Cash Value

Question 27

Conditions, how are losses paid.

Answer 27

There are also several conditions concerning how losses will be paid.

• The loss settlement condition states that covered property losses are valued at actual cash value but are not to exceed the amount necessary to repair or replace. DP-2 and DP-3 settle losses to personal property at actual cash value. Losses to the dwelling and other structures, however, are paid on a replacement cost basis, as long as the insured carries insurance equal to 80% or more of the full replacement cost of the building at the time of the loss.
• The our option condition gives the insurer the right to repair or replace damaged property with material or property of like kind and quality within 30 days of receiving the insured’s statement ofloss.
• The deductible clause states that only the amount of loss over the deductible will be paid, up to the limit of liability.
• The pair or set condition states that, in the case of a loss to an item that is part of a pair or set, the insurance company is not obligated to pay the value of the entire set. The company may either repair or replace part of the set or pay the difference between the actual cash value of the property
betore and after the loss.
• The loss payment condition states that the loss will be paid within 60 days after reaching an agreement with the insured.
• The other insurance condition states that, if a loss is also covered by other insurance, the insurance company will pay only its proportion of the loss.
• The recovered property condition states that, it the insured or insurer recovers property on which the insurer has made loss payment, the other party must be notified. The insured may have the property returned, in which case the loss payment will be adjusted, or allow the company to have it.

Question 28

Personal Liability and Medical Payments to Others:Coverages L

Answer 28

The insured may purchase personal liability and medical payments to others coverage as an endorsement to the dwelling policy or as a separate policy. These coverages are very similar to those provided in the liability section of the homeowners policy, which is examined in another unit.

**Coverage L- personal liability **
provides coverage for damages that the insured becomes legally obligated to pay because of an occurrence to which the coverage applies that causes bodily injury or property damage. The insurer will also defend the insured against such claims at its own expense, even if the suit is groundless or fraudulent. The policy minimum limit is $100,000.

Personal Liability Supplement
• Coverage I- personal liability
• At fault
• Bodily injury to others
• Property damage to others
• On and off premises

Question 29

Personal Liability and Medical Payments to Others:Coverages M- Medical

Answer 29

Under Coverage M-medical payments to others, the insurer will pay all necessary medical expenses incurred within three years of an accident that causes bodily injury. This coverage applies to injuries sustained while the injured party is:
• on the insured location with the insureds permission: or
• off the insured location if the injury arises out of a condition
- on the insured location,
- caused by the activities of the insured, or
caused by an animal in the insureds care.
There is a minimum limit of $1,000 per person under this coverage. The insured does not have to be legally liable for coverage to apply. Coverage does not apply to any injury sustained by the insured or
the insured’s family members.

Personal Liability Supplement
• Coverage M-medical
payments
• Medical and bills of others
• No fault
• 3 years
• On and off premises

Question 30

Additional coverages BAILED

Answer 30

Personal liability and medical payments to others coverage also includes three additional coverages: claim expenses, first aid to others, and damage to property of others. Losses under these coverages are paid in addition to the limit of liability and do not cost any extra to the insured.
Remember the acronym BAILED:

Bonds-Premiums for certain types of bonds, such as bail bonds, appeal bonds, and release of
attachment bonds

• Aid (first aid) to others at the time or an accident

• Interest–Prejudgment interest is the interest on court-ordered payments, and postjudgment interest is the interest accruing on the judgment after an award has been made but before payment is made by the insurance company.

• Loss of earnings-Loss of earnings for the insured (such as when the insured is required to miss work for court appearances)

• Expenses-Expenses incurred in the investigation of a claim, including claims adjuster costs, expert witness fees, etcetera; reasonable expenses incurred by the insured at the company’s
request in the investigation or detense or a claim

• Defense costs–The cost of hiring an attorney to defend the insured it sued, even it the insured is not liable, paid in addition to the per occurrence or policy aggregate limits

Expenses for first aid to others are covered when they are incurred by the insured for bodily injury to others that is covered by the policy.
If the insured causes damage to the property of others, the policy will provide replacement cost coverage of up to $1,000 for each occurrence or loss

Question 31

Exclusions

Answer 31

Bodily injury or property damage arising out of the following are excluded under both Coverage L and Coverage M:
• war
• Losses that are expected or intended by the insured
• Business pursuits or the rendering of or failure to render professional services
• Transmission of a communicable disease by an insured
• Sexual molestation, corporal punishment, or physical or mental abuse
• Use, sale, or possession or controlled substances other than the legitimate use or prescription
drugs
• Rental of a premises that would not be eligible for coverage under the policy
• A premises owned by or rented to the insured or rented by the insured to others that is not
considered an insured location
• Ownership, maintenance, use, loading, or unloading of most types of watercraft, aircraft, or vehicles
Additional exclusions that apply only to

Coverage L include liability:
• for damage to property owned by an insured;
• for damage to property rented to, occupied or used by, or in the care of an insured (unless the loss is caused by fire, smoke, or explosion);
• for losses that would be covered under a workers compensation or similar law;
• for loss assessments charged against the insured as a member of an association, corporation, or
community of property owners;
assumed under most contracts or agreements; and
• for injury to the insured or any relative or minor who resides in the same household.

Coverage M does not apply to bodily injury:
• to a residence emplovee that occurs off the insured location and does not arise ont of or in the
course ot work the emplovee pertorms for the insured;
• due to any nuclear hazard; or
• to any person other than a residence employee who regularly resides on any part of the insured location

Question 32

Residential Theft Coverage Endorsement

Answer 32

Theft coverage is not automatically included in a dwelling policy; however, it may be added with a broad theft coverage endorsement or a limited coverage endorsement. The limited theft coverage endorsement is available for dwellings that are not owner occupied. The broad theft endorsement is only available to owner-occupied dwellings and can apply to on and off-premise theft. Both endorsements provide coverage for theft, attempted theft, and vandalism or malicious mischief as a result of theft. Special limits apply to certain personal property, and certain property is excluded on
both endorsements
Property may be covered while on or off the premises. Separate limits of liability apply for on and off-premises coverage, and off-premises coverage is available only if on-premises coverage is written.

Question 33

Residential Theft Coverage cont.

Answer 33

Residential Thett Coverage
• NOT automatically included in dwelling policy
• On and oft premise
• Broad–owner occupied
• Limited–not owner occupied

The following property is not covered:
• Animals, birds, and fish
Credit cards and tund transter cards
• Property while it is in the mail
• Aircratt and parts, other than model or hobby aircratt
• Property held as a sample or for sale or delivery after sale
• Property separately described and specifically insured by other insurance
• Property of tenants. roomers. and boarders that are not related to an insured
• Business property of an insured or residence employee
• Property that is in the custody and control of others, such as a laundromat, tailor, or cleaner (except for loss by burglary or robbery)
• Motor vehicles and their equipment (does not apply to vehicles used to service the location or to assist those with disabilities such as motorized scooters and wheelchairs)

Question 34

Special Coverage limits

Answer 34

Special limits of liability apply to the following classes of property:
• S200 for money or related property, coins, and precious metals
• $1,500 for securities, manuscripts, and other valuable paper property
• $1,500 for watercraft, including trailers and equipment
• S1,500 for trailers not used with watercratt
• $1,500 for jewelry, watches, furs, and precious and semiprecious stones
• $2,500 for firearms
• $2,500 for silverware, goldware, or pewterware
The insured is required to notify the police when a theft loss occurs.

Question 35

Other endorsements

Answer 35

The following are other endorsements that may be used with the dwelling policy:
• Automatic increase in insurance -provides an annual increase in the Coverage A and B amount of 4%, 6%, or 8%
• Dwelling under construction-attached to provide coverage when the intended occupant ofa dwelling under construction is the named insured
- The limit of liability that applies at any given time is a percentage of the policy limit based on the value of the partially completed home. The available policy limit increases as construction of the home progresses.
• Mobile home–allows home and personal property to be insured
This endorsement requires the mobile home to be on a permanent foundation.