Utah Personal Lines Insurance License Exam — All Questions

The broad form dwelling policy is best described as covering the building against:

• a.A longer list of named perils than the basic form✓
• b.Named perils on the dwelling, open perils on contents
• c.Open perils on the dwelling and its contents alike
• d.The same perils as the basic form at a lower cost

The broad form stays a named-peril contract but stretches the list, picking up items such as damage by burglars, falling objects, weight of ice and snow, accidental discharge of water, and freezing. Open perils on the dwelling is the special form's feature, and no dwelling form insures contents on an open-perils basis.

On a special form dwelling policy, personal property is insured against:

• a.Named perils, and the dwelling is on named perils too
• b.Open perils, on the same basis as the dwelling itself
• c.Named perils, while the dwelling is open perils✓
• d.Fire and lightning only, unless the form is endorsed

The special form splits the policy: the dwelling and other structures are written open perils, while personal property keeps the broad form's named-peril list. The answer giving contents open perils describes a homeowners form built that way, and the answer keeping the dwelling on named perils describes the broad form instead.

Why would a producer recommend a special form dwelling policy over a basic form?

• a.It adds personal liability and medical payments coverage
• b.It costs less because the form names three covered perils
• c.It drops the deductible that applies to property losses
• d.It insures the dwelling against any peril not excluded✓

The special form's value is its open-perils wording on the building: instead of matching the loss to a listed peril, the insured is covered unless the policy excludes the cause. Neither form includes liability, which is endorsed on, and moving to the special form raises rather than lowers the premium while leaving the deductible in place.

After an unexplained loss to a dwelling written on an open-perils form, the burden of proof:

• a.Falls on the insurer to show an exclusion applies✓
• b.Is shared equally by the insurer and the insured
• c.Falls on the insured to name the peril that caused it
• d.Falls on the adjuster hired by the mortgage holder

Open-perils wording reverses the usual burden. The insured shows a direct physical loss, and the insurer must point to an exclusion to deny it. The answer making the insured name the peril states the rule for a named-perils form such as the basic or broad dwelling policy, where the loss must be matched to a listed cause.

Under a dwelling policy, Coverage A pays for damage to:

• a.The described dwelling and structures attached to it✓
• b.Any residential building the insured owns at any location
• c.The tenant's own furniture kept inside the dwelling unit
• d.Detached garages, sheds, and fences on the same premises

Coverage A insures the dwelling shown on the declarations, including structures attached to it, plus materials and supplies on the premises for its repair. Detached garages, sheds, and fences sit under the other structures coverage, and household contents belong to the personal property coverage, whoever owns them.

A detached garage on the insured premises burns to the ground. A dwelling policy pays the loss under:

• a.Coverage B, which insures other structures on site✓
• b.Coverage C, since a garage stores personal property
• c.Coverage A, because a garage is part of the dwelling
• d.Coverage D, which restores the owner's rental income

Structures on the described premises that are separated from the dwelling by clear space are insured under the other structures coverage, and a detached garage is the standard example. The dwelling coverage would apply only if the garage were attached, and the fair rental value coverage responds to lost rent, not to a burned building.

A structure on the described premises rented to someone who is not a tenant of the dwelling is:

• a.Covered as an other structure without any condition
• b.Excluded, unless it is used only as a private garage✓
• c.Covered under the dwelling limit instead of Coverage B
• d.Excluded, because rented buildings are commercial risks

The other structures coverage does not extend to a structure rented or held for rental to anyone who is not a tenant of the dwelling, with a private garage as the recognised exception. The answer covering it with no condition ignores that carve-out, and renting a structure does not by itself convert the premises into a commercial risk.

How is the personal property limit set on a dwelling policy?

• a.It equals the limit written for other structures
• b.It is a fixed percentage of the Coverage A limit
• c.It is written for the full replacement cost of contents
• d.The insured selects a separate limit for Coverage C✓

On a dwelling policy the personal property amount is chosen and shown on the declarations rather than derived from the building limit, which is why a landlord can carry a small contents amount or none at all. The percentage answer describes the homeowners architecture, where the contents limit is set as a share of the dwelling limit.

Which item would NOT be covered as personal property under a dwelling policy?

• a.A washing machine used by the owner's household
• b.A set of power tools kept in the utility room
• c.A window air conditioner stored in the basement
• d.A pet parakeet kept in the family's living room✓

Animals, birds, and fish sit on the dwelling forms' property-not-covered list, alongside motor vehicles and aircraft, so the bird is outside the contents coverage entirely. The appliances and tools are ordinary household property usual to the occupancy of a dwelling and are insured up to the personal property limit shown on the declarations.

Personal property temporarily away from the described location under a dwelling policy is:

• a.Covered up to a percentage stated in the policy✓
• b.Excluded once it leaves the described location
• c.Covered for the full Coverage C limit anywhere
• d.Covered only while it sits in a storage facility

The dwelling forms follow contents off the premises, but only up to the share of the personal property limit the form states, and the same perils apply. The answer giving the full limit worldwide overstates it, and the answer cutting coverage off at the property line ignores the off-premises extension the form contains.

Coverage D on a dwelling policy pays the owner for:

• a.Rent a tenant refuses to pay during a lease term
• b.The cost of housing the tenant in a nearby hotel
• c.Rent lost while a covered loss is being repaired✓
• d.Legal fees spent evicting a nonpaying occupant

Fair rental value replaces the rental income the described premises would have produced during the time needed to repair covered damage. It is not a credit device: unpaid rent from a solvent tenant, eviction costs, and the tenant's own hotel bill are business risks the landlord carries, because the policy responds only to a covered physical loss.

Coverage E on a dwelling policy responds when:

• a.A tenant stops paying rent after a covered fire loss
• b.The insured decides to remodel a kitchen and move out
• c.A covered loss destroys furniture the insured owned
• d.A covered loss makes the insured's home unlivable✓

Additional living expense pays the increase in the insured household's own cost of living while the damaged home is unfit to live in, covering items such as temporary lodging and higher meal costs. Lost rent belongs to fair rental value, destroyed furniture is a contents claim, and a voluntary remodel is not a covered loss at all.

An owner lives in half of a duplex and rents out the other half. A covered fire makes both halves unlivable. The correct treatment is:

• a.Both the lost rent and her own costs under Coverage D
• b.Both the lost rent and her own costs under Coverage E
• c.Neither loss is payable because a half is rented
• d.Lost rent under Coverage D, her own costs under E✓

The two indirect-loss coverages divide by whose loss it is: fair rental value handles income from the portion held for rental, and additional living expense handles the increased cost of living for the insured's own household. Renting part of a dwelling does not defeat either coverage, so the answer denying both losses misreads the eligibility rules.

When a dwelling policy settles a fair rental value claim, the insurer pays:

• a.The value the building lost in the local market
• b.The gross rent the lease named, with no offset at all
• c.The lost rent minus expenses that do not continue✓
• d.The rent plus the value of the owner's lost time

Fair rental value is an indirect-loss coverage measured by rental income lost during the repair period, reduced by expenses that stop while the unit is unusable, such as utilities the owner no longer buys. Paying the gross lease amount would put the owner ahead of where the fire found her, which the principle of indemnity does not allow.

A dwelling insured on a basic form is damaged by fire. The building loss is settled on:

• a.A functional replacement cost basis for old homes
• b.An actual cash value basis at the time of loss✓
• c.A replacement cost basis with no deduction taken
• d.A market value basis set by a local appraisal

The basic dwelling form settles building losses at actual cash value, that is, replacement cost less depreciation at the time of the loss. Replacement cost on the dwelling is what the broad and special forms offer when their insurance-to-value condition is met, and market value is a sale price that reflects land and location rather than rebuilding cost.

A basic form dwelling loses a roof section that costs $12,000 to replace and has depreciated $4,000. Before any deductible, the policy pays:

• a.$4,000, the amount by which the old roof depreciated
• b.$12,000, the full cost of installing a new roof
• c.$8,000, the depreciated value of the damaged roof✓
• d.$6,000, one half of the roof's replacement cost

Actual cash value is replacement cost less depreciation: $12,000 minus $4,000 leaves $8,000, and the deductible then comes off that figure. Paying the full $12,000 would apply the broad or special form's replacement-cost settlement, and paying $4,000 hands the insured the depreciation instead of the value that was actually destroyed.

The broad and special dwelling forms differ from the basic form in that they settle:

• a.Losses to personal property at full replacement cost too
• b.Dwelling losses at replacement cost, not actual cash value✓
• c.Dwelling losses at the home's current fair market value
• d.Every covered loss at actual cash value after depreciation

Both the broad and special forms pay building losses at replacement cost, provided the insured carries the percentage of replacement cost the policy's loss-settlement condition demands. Personal property stays on an actual cash value basis unless a replacement cost endorsement is bought, so the contents answer overstates what the forms give.

A dwelling costs $300,000 to replace and is insured on a special form for $180,000 under an 80% loss-settlement condition. A partial building loss is settled:

• a.At replacement cost, because this loss is only partial
• b.At less than replacement cost; $240,000 was required✓
• c.At market value, since the limit fell below that cost
• d.At replacement cost, because a stated limit was purchased

The condition requires 80% of $300,000, or $240,000, and the owner carries $180,000. Falling short of that figure drops the settlement to the greater of actual cash value or the proportion of the repair cost that $180,000 bears to $240,000. Buying any limit does not earn replacement cost, and market value is not a settlement basis in these forms.

Why is theft of the insured's property not paid under an unendorsed dwelling policy?

• a.Theft is covered but capped at a small dollar sublimit
• b.Theft is not one of the perils the form insures against✓
• c.Theft losses are paid only after a police report is filed
• d.Theft applies only while the dwelling is owner occupied

No dwelling form, basic, broad, or special, carries theft as an insured peril, which is one of the sharpest differences from a homeowners policy. A theft coverage endorsement adds it. The sublimit answer imports the homeowners treatment of jewelry and firearms, where theft is covered but capped, into a form that does not insure theft at all.

Burglars force a door on a dwelling insured on an unendorsed broad form and carry off a television. The policy pays for:

• a.Neither loss, because burglars are excluded entirely
• b.The damage done to the door, but not the television✓
• c.The television, but not the damage done to the door
• d.Both the broken door and the stolen television set

The broad form lists damage caused by burglars as an insured peril, so the shattered door is a building loss, but the stolen property itself is theft, which the form does not insure without an endorsement. The answer paying both treats the burglary peril as if it were theft coverage, and damage by burglars is plainly not excluded.

A visitor slips on the steps of a rented dwelling and sues the owner. An unendorsed dwelling policy:

• a.Pays nothing, because it insures property only✓
• b.Pays the claim only if the owner lives in the home
• c.Defends the owner under its liability insuring clause
• d.Pays the visitor's medical bills on a no-fault basis

A dwelling policy is a first-party property contract with no liability section, so a bodily injury suit against the owner falls outside it until a personal liability endorsement is attached. No-fault medical payments to others and a duty to defend are Section II features of a homeowners policy or of that endorsement, not of the bare dwelling form.

A tenant renting a house may use a dwelling policy to insure:

• a.The landlord's building at its full replacement cost
• b.Household goods and improvements the tenant installed✓
• c.The rent the landlord loses after a covered fire
• d.The tenant's liability to guests injured in the house

A tenant can be the named insured on a dwelling policy for personal property, and the contents coverage also picks up improvements, alterations, and additions the tenant made to the rented premises. The tenant has no insurable interest in the landlord's building limit or rental income, and liability is not part of the property form.

A landlord insuring a rented house wants the building, the appliances she supplies, and her rental income protected. She needs:

• a.Coverages A and B, plus Coverage E for the tenant
• b.Coverage C alone, because the tenant owns the home
• c.Coverages A and C written along with Coverage D✓
• d.Coverage A only, since the tenant insures the rest

The dwelling limit covers the building, the personal property limit covers appliances and furnishings the landlord owns and keeps on the premises for the tenant's use, and fair rental value replaces income lost while repairs are made. Additional living expense would respond to the insured's own household costs, which a nonresident landlord does not have.

A dwelling in which the owner runs a small insurance office is:

• a.Ineligible, unless a commercial package policy is bought
• b.Ineligible, because any business use voids the form
• c.Eligible, as a permitted incidental business occupancy✓
• d.Eligible, but only if the office has its own entrance

The dwelling program tolerates a permitted incidental occupancy such as an office, a professional practice, a private school, or a studio, and business property in the dwelling can be picked up by endorsement. The answer voiding the form for any business use is too broad, and a separate entrance is not what makes the occupancy acceptable.

A dwelling policy is written on a house that is still being built. Under the standard forms, that building is:

• a.Treated as vacant until furniture is moved into it
• b.Covered once a certificate of occupancy is issued
• c.Insured only for materials sitting on the job site
• d.Not treated as vacant while construction continues✓

The dwelling forms state that a building under construction is not considered vacant, so the vacancy condition that suspends vandalism and certain other perils does not bite during the build. A certificate of occupancy is a municipal document, not a condition of coverage, and the dwelling limit insures the structure itself as well as materials on site.

A neighbor's car skids off the road into a dwelling insured on a basic form with extended coverage. The damage is:

• a.Excluded, since vehicle damage requires an auto policy
• b.Covered, because vehicles is one of the basic form perils
• c.Excluded, unless the driver's own insurer denies the claim
• d.Covered, because vehicles is an extended coverage peril✓

Vehicles sits in the extended coverage group along with windstorm or hail, explosion, riot, aircraft, smoke, and volcanic eruption, so the endorsed basic form pays for the struck building. The property claim does not wait on the driver's auto insurer, though the dwelling carrier may pursue subrogation against the neighbor afterward.

The most commonly purchased Homeowners form, which covers the dwelling on an open-perils basis and personal property on a named-perils basis, is the:

• a.HO-8
• b.HO-3✓
• c.HO-2
• d.HO-4

The HO-3 (special form) is the most widely purchased Homeowners policy. It insures the dwelling and other structures on an open-perils basis while covering personal property on a named-perils basis. HO-2 covers both on named-perils, HO-4 is the renters form, and HO-8 is a modified form for older homes. The HO-5 comprehensive form extends open-perils coverage to personal property as well.

A tenant who rents an apartment and wants to insure personal belongings and obtain personal liability coverage should purchase:

• a.HO-6
• b.HO-8
• c.HO-4✓
• d.HO-3

The HO-4 form is the renters (tenants) policy. It covers the tenant's personal property and provides personal liability and loss-of-use coverage, but not the building, which is the landlord's responsibility. HO-6 is for condominium unit owners who own the interior, and HO-3 and HO-8 are owner-occupied dwelling forms that include structural coverage the renter does not need.

A condominium unit owner who needs to insure the interior of the unit and personal property should buy:

• a.HO-3
• b.HO-8
• c.HO-6✓
• d.HO-4

The HO-6 form is designed for condominium unit owners. It covers the unit owner's personal property and the portions of the building the owner is responsible for (typically interior walls, fixtures, and improvements), along with personal liability and loss of use. The condo association's master policy covers the building structure and common areas, so HO-6 fills the gap for the individual unit owner.

Under a Homeowners policy, which coverage provides additional living expense when a covered loss makes the home temporarily uninhabitable?

• a.Coverage D – Loss of Use✓
• b.Coverage E – Personal Liability
• c.Coverage A – Dwelling
• d.Coverage F – Medical Payments to Others

Coverage D (Loss of Use) pays additional living expenses, the reasonable extra costs of maintaining a normal standard of living, when a covered loss makes the residence uninhabitable, such as hotel and increased meal costs. Coverage A insures the dwelling structure, while Coverages E and F are the Section II liability coverages. Loss of use addresses the insured's indirect costs, not the physical damage.

Coverage F (Medical Payments to Others) under a Homeowners policy pays medical expenses for an injured guest:

• a.Only for members of the insured's own household
• b.Only after a lawsuit is filed against the insured
• c.On a no-fault basis, regardless of the insured's liability✓
• d.Only if the insured is legally at fault

Medical Payments to Others (Coverage F) is a no-fault, goodwill coverage that pays reasonable medical expenses for a non-resident injured on the insured premises or by the insured's activities, whether or not the insured is legally liable. It does not cover the insured or regular household residents. Paying small medical claims quickly helps preserve goodwill and can prevent larger liability lawsuits.

Under a Homeowners policy, categories such as jewelry, watches, and firearms are subject to:

• a.Special dollar sublimits that cap the amount payable✓
• b.Replacement cost settlement without any dollar cap
• c.A total exclusion unless the items are scheduled
• d.The full Coverage C limit with no internal cap

Homeowners policies apply special limits (sublimits) to certain high-value or high-theft categories such as jewelry, watches, furs, firearms, cash, and silverware. These items are covered, but only up to a stated dollar cap that is lower than the overall Coverage C limit. To fully protect valuable items, the insured can schedule them on a personal articles (scheduled property) endorsement for broader, itemized coverage.

The HO-8 modified Homeowners form is intended for:

• a.Renters who insure their contents but not the building
• b.Older homes whose replacement cost exceeds market value✓
• c.New luxury homes needing the broadest available coverage
• d.Condominium owners insuring interior building items

The HO-8 modified form is designed for older or historic homes where replacing with identical materials would cost far more than the home's market value. It settles losses on a functional replacement or actual cash value basis rather than full replacement cost, keeping the policy affordable and insurable. Renters use HO-4, condo owners use HO-6, and the broadest coverage is the HO-5 comprehensive form.

Eligibility for an owner-occupied Homeowners form such as the HO-3 requires that:

• a.the dwelling be leased to a tenant year round
• b.the dwelling be under a written one-year lease
• c.the named insured own and live in the dwelling✓
• d.the named insured hold the mortgage on the home

A Homeowners policy is a package written for an owner who occupies the dwelling as a residence, which is why it can bundle building, contents and liability in one contract. The answer about holding the mortgage confuses the lender's interest with occupancy; a mortgagee is simply named on the declarations and is not the person who must be eligible.

An investor buys a house solely to rent out and does not live there. A Homeowners policy cannot be written because:

• a.a tenant's liability cannot be insured under any form
• b.the owner does not occupy the house as a residence✓
• c.an investor has no insurable interest in the house
• d.a rented house can only be written on open perils

Owner-occupancy is the eligibility test for a Homeowners form, so a pure rental property is written on a Dwelling policy instead, with rental income insured as fair rental value. The insurable-interest answer is wrong because an owner plainly stands to lose money if the rental house burns.

A tenants form (HO-4) differs from the owner-occupied forms mainly because it:

• a.covers the landlord's building for its full value
• b.carries no Coverage A limit on the building itself✓
• c.leaves out personal liability for the renting party
• d.insures personal property on an open-perils basis

A renter does not own the structure, so the tenants form insures contents and loss of use and carries no dwelling limit; the landlord insures the building separately. The open-perils answer describes the HO-5, since contents on a tenants form are written on the broad list of named perils.

A unit-owner buys a standard HO-6. Before any endorsement, the built-in Coverage A limit for building property is:

• a.$5,000✓
• b.$1,000
• c.$25,000
• d.$10,000

The unit-owners form carries a small built-in Coverage A of $5,000 for building property such as interior fixtures, cabinets and floor coverings that the association's master policy does not insure. That limit is routinely raised by endorsement when the unit has costly built-ins, so the $25,000 answer describes a bought-up limit rather than the standard one.

Which Homeowners form covers both the dwelling and the personal property on an open-perils basis?

• a.HO-8
• b.HO-5✓
• c.HO-3
• d.HO-2

The comprehensive form applies open perils to the dwelling and to contents, so the insurer must name an exclusion in order to deny either kind of loss. The HO-3 answer is the common trap: it writes the dwelling open perils but leaves contents on the broad list of named perils, and the HO-8 is the modified form for an older home.

On the HO-2 broad form, the dwelling and the personal property are insured:

• a.on an open-perils basis with few exclusions
• b.for fire and lightning and smoke only
• c.against the broad form list of named perils✓
• d.on an open-perils basis for the dwelling alone

The broad form runs both the building and the contents off the same list of named perils, so a loss is paid only if the insured can point to a peril on that list. The answer that puts open perils on the dwelling alone describes the HO-3, and the fire-and-lightning answer describes a much narrower basic form.

A covered dwelling loss under the HO-8 modified form is settled on the basis of:

• a.repair cost using common construction materials✓
• b.the original purchase price plus improvements
• c.full replacement cost with no depreciation taken off
• d.the home's market value on the day of the loss

The modified form exists for an older home whose replacement cost far exceeds its market value, and it pays the cost to repair or replace using common construction materials and methods rather than reproducing ornate original work. The full-replacement-cost answer describes the dwelling settlement on an HO-3, which is exactly what the modified form is designed to avoid.

Under an open-perils dwelling form, the burden of proof at claim time works this way:

• a.the insured must name the peril that caused it
• b.the insurer must point to an exclusion to deny✓
• c.the insured must show the peril is on a list
• d.the insurer may deny it without citing the policy

Open perils covers direct physical loss unless the cause is excluded, so the insured shows a loss occurred and the burden shifts to the insurer to identify the exclusion it relies on. The answer that makes the insured prove the peril is on a list states the named-perils rule, which is how contents are handled on an HO-3.

A home carries Coverage A of $280,000. A detached garage is destroyed and costs $34,000 to rebuild. On an unendorsed form, Coverage B pays at most:

• a.$34,000
• b.$56,000
• c.$28,000✓
• d.$14,000

Coverage B is provided at 10% of Coverage A, and 10% of $280,000 is $28,000, so the owner absorbs the remaining $6,000 of rebuilding cost. The $34,000 answer assumes other structures are paid up to their full rebuilding cost; the limit is a stated percentage, and it is an additional amount of insurance rather than a slice carved out of Coverage A.

Which of these is insured under Coverage B rather than under Coverage A?

• a.a detached garage separated by clear space✓
• b.a second-story addition on the dwelling
• c.an attached garage that shares a house wall
• d.a screened porch built onto the dwelling

Coverage B picks up structures set apart from the dwelling by clear space, or joined to it only by a fence, utility line or similar connection, so a free-standing garage, a storage shed or an in-ground pool belongs there. The attached-garage answer is wrong because a structure sharing a wall with the house is part of the dwelling and draws on Coverage A.

A homeowner rents a detached backyard cottage to a stranger who runs a salon there. Under Coverage B the cottage is:

• a.covered in full up to the Coverage B limit
• b.covered under Coverage A as part of the home
• c.covered, but only for fire and lightning
• d.not covered, as it is a business rental✓

Coverage B drops a structure that is rented to someone who is not a tenant of the dwelling, and it also drops any structure held for business use; a detached garage rented to a tenant of the home is the narrow exception. The answer paying the full Coverage B limit ignores both the rental and the business use, and the structure is detached, so Coverage A never reaches it.

A dwelling is written with Coverage A of $240,000. On an unendorsed Homeowners form, the Coverage C limit is:

• a.$240,000
• b.$120,000✓
• c.$96,000
• d.$24,000

Personal property is written at 50% of the dwelling limit on the standard form, so 50% of $240,000 gives $120,000 of Coverage C. The $24,000 answer applies the 10% figure that belongs to other structures, and the $240,000 answer would insure contents to the full value of the building.

The 50% relationship between Coverage C and Coverage A is best described as:

• a.a default the insured may raise or lower✓
• b.a percentage that applies only to tenant forms
• c.a fixed limit that no endorsement can change
• d.a cap the insurer sets after the loss occurs

The 50% figure is the amount built into the form, and a household with heavy furnishings can buy the limit up for extra premium while a sparsely furnished home can have it reduced by endorsement. The answer calling it unchangeable misreads a standard starting point as a hard cap, and the limit is set when the policy is written, not after a loss is reported.

Personal property usually kept at an insured's other residence, such as a vacation cabin, is limited to:

• a.10% of Coverage A or $1,000, whichever is larger
• b.10% of Coverage C or $1,000, whichever is more✓
• c.50% of Coverage C, the same as at the home
• d.$1,000 flat, with no percentage option used

Contents are covered anywhere in the world, but property usually located at a residence of an insured other than the residence premises is capped at the greater of 10% of Coverage C or $1,000. The version built on Coverage A uses the dwelling limit, which is not the base for contents, and the flat answer throws away the greater-of test that protects a large contents limit.

Coverage D pays fair rental value instead of additional living expense when:

• a.a rented part of the home is unfit to use✓
• b.the loss comes from a peril that is excluded
• c.the insured picks the larger of two amounts
• d.the insured's own family moves to a motel

Loss of use has two halves: additional living expense keeps the insured's own household at its normal standard of living, while fair rental value replaces the rent lost on a portion of the premises held for rental, less any expenses that stop. The motel answer describes the additional living expense side, and neither half responds when the underlying peril is excluded.

A fire makes a home unlivable. Coverage A is $310,000 and the HO-3 provides loss of use at 30% of Coverage A. The most payable under Coverage D is:

• a.$31,000
• b.$93,000✓
• c.$62,000
• d.$155,000

Coverage D on an owner-occupied form is written at 30% of the dwelling limit, and 30% of $310,000 is $93,000. The $31,000 answer applies the 10% figure that belongs to other structures, and the $155,000 answer applies the 50% contents relationship to the wrong coverage.

On an HO-4, the Coverage D limit is stated as a percentage of:

• a.Coverage A, at 10% of the dwelling limit
• b.Coverage A, at 30% of the dwelling limit
• c.Coverage C, at 50% of the contents limit
• d.Coverage C, at 30% of the contents limit✓

A tenant has no dwelling limit to work from, so loss of use on the tenants form is pegged to contents at 30% of Coverage C. The answer using 50% of Coverage C is the unit-owners relationship, and both answers built on Coverage A assume a dwelling limit the tenants form does not carry.