Dwelling PolicyQuestion 80 of 158
Under a standard DP-3 without additional endorsements, how is a covered loss to the named insured's Coverage C personal property settled?
a.Actual cash value (replacement cost minus depreciation)
b.Replacement cost without depreciation
c.Functional replacement cost
d.Guaranteed replacement cost up to 125% of the limit
Explanation
Under every Dwelling Property form, personal property is settled at actual cash value (ACV) by default. To upgrade Coverage C to replacement cost the insured must add the Personal Property Replacement Cost Endorsement. Guaranteed replacement cost and functional replacement cost are not the standard settlement methods for DP Coverage C.
Law Reference: ISO Dwelling forms — Coverage C personal property settlementPractice all 158 questions free — no signup required.
Related questions on this topic
- A DP-3 dwelling has a replacement cost of $500,000. The landlord carries $300,000 of insurance and suffers a $60,000 partial loss with a $1,000 deductible. Using the coinsurance proportionate formula, what is the insurer's payment?
- Under a DP-3 written with $400,000 Coverage A, what is the automatic limit available for Coverage B (Other Structures) such as a detached garage?
- Which of the following is one of the BROAD perils added by the DP-2 Broad Form on top of the basic DP-1 perils?
- A landlord who rents out a single-family house on a DP-3 asks whether theft losses to the dwelling are covered. Which statement is MOST accurate?
- A homeowner uses a DP-3 to cover a vacation cabin she personally occupies four months each year. When a covered fire makes the cabin uninhabitable during her stay, which DP coverage reimburses her extra hotel and meal costs?
- A California landlord on a DP-3 asks whether a future earthquake that damages the rental house will be covered. Which response is correct?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California Personal Lines Insurance License Exam · How we review