Property and Casualty Insurance Pre-
Licensing (Louisiana) Chapter 3 Dwelling Policy Notes questions with 100% correct answers (Graded A+) 2023
Debris - Answer-remains of anything broken down or destroyed
Incidental occupancy - Answer-minor uses that are accessory to or support the predominant occupancy (e.g., a piano teacher giving lessons in her home)
Occurrence - Answer-an incident or event
Ordinance - Answer-A law that must be complied with
Overinsurance - Answer-when a property's insurance coverage exceeds its cash value
Premises - Answer-a house or building (including land and outer buildings) utilized by a business
Vandalism - Answer-intentional destruction or damage to property
Characteristics and purposes - Answer-The dwelling property policy was developed by the ISO to be used primarily as a property coverage form
The policy can be used to insure the dwelling only, contents only, or both.
Endorsements exist to amend the coverage to tailor it to the specific needs of the policy applicant
Liability coverage is not included, but can be added. In practice, this is a common policy
form used to insure the rental dwellings
Three separate coverage forms that are available under the dwelling program - Answer-
Basic, Broad, and Special form coverage
ISO classifications of Dwelling Property Policies - Answer-DP with a corresponding form
number to denote the policy type (DP-1, DP-2, or DP-3)
A Dwelling Property policy can be purchased to insure properties solely used for residential purposes in the following situations - Answer-Up to 5 roomers or boarders;
Up to 4 residential units; Properties in the course of construction;
Owner occupied, tenant occupied, or both;
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;
Seasonal dwellings unoccupied for 3 or more months during a 12-month period; or
Not designed as farm property
Business occupancies - Answer-may impact eligibility under the dwelling program
They can be accommodated as long as they are incidental, are conducted by the insured on the dwelling premises, and if there are no more than 2 persons working at any time.
Permissible incidental occupancies for businesses - Answer-include small service operations where sales of merchandise are not the primary function, for example, barber and beauty shops, tailors, or shoe repair operations that use handwork only. Professional offices, private schools or studios such as music or photography may also be considered
General Form Structure (Dwelling Policy) - Answer-The 3 coverage forms applicable to the dwelling property define the coverages, perils or causes of loss insured against, other coverages, exclusions and conditions.
Every ISO form has a certain flow of the information. The DP form structure is as follows
- Answer-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);
Definitions-limited in nature;
Deductible- applies to all covered losses unless noted otherwise in the policy form;
Coverages, including Other Coverages- define direct and indirect property coverages, and additional coverages included in the premium charge;
Perils Insured Against- vary by form and is a key differentiator in form selection;
General Exclusions- perils not covered in all forms; and
Conditions- specify when coverage will apply The forms available in the dwelling program are as follows - Answer-Basic- Form Number: DP 00 01 or DP1
Peril Type(s): Named Peril
Broad- Form Number: DP 00 02 or DP2 Peril Type(s): Named Peril
Special- Form Number: DP 00 03 or DP3 Peril Type(s): Open and Named Peril
Basic Coverage Forms- Perils Insured Against - Answer-Named peril coverage
Provides the most limited coverage of the three forms.
There is no minimum amount of insurance required.
The basic form insures against the following perils or causes of loss - Answer-Fire or Lightning and Internal Explosion
Windstorm or hail
Explosion
Riot or civil commotion
Aircraft
Vehicles
Smoke
Volcanic Eruption
There are a couple of acronyms that can be used to help remember the extended coverage perils - Answer-WHARVES
W.C.SHAVER
Fire or Lightning and Internal Explosion - Answer-An explosion that takes place in a dwelling, other structure, or in a structure containing covered personal property will be covered.
Coverage does not include loss or damage resulting from electric arcing, breakage of water pipes, breakage or operation of pressure relief devices, or explosion of steam boilers or steam pipes owned, leased or operated by the insured
For fire to be covered, the loss must be the result of a hostile fire.
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