Dwelling PolicyQuestion 86 of 158
A broker writes a DP-3 on a client's three-unit rental building. The client also wants protection if a tenant sues for an injury on the premises. What is the proper way to add that protection?
a.Increase Coverage A by 20% so the additional amount funds liability claims
b.Add the Personal Liability Supplement endorsement to the DP, or write a separate landlord liability policy
c.Rely on Coverage D Fair Rental Value, which pays third-party injury claims
d.Endorse the policy with the Ordinance or Law form, which doubles as liability coverage
Explanation
The Dwelling Policy has no liability in its base form, so the proper solution is to add the Personal Liability Supplement endorsement (which adds Coverage L liability and Coverage M medical payments and can schedule additional locations) or to write a separate landlord liability policy. Coverage A is for building damage only and cannot be repurposed for lawsuits. Coverage D pays the landlord's lost rents, not tenant injury claims. Ordinance or Law adds building code upgrade costs, not liability.
Law Reference: ISO DP 04 01 — Personal Liability SupplementPractice all 158 questions free — no signup required.
Related questions on this topic
- Under a standard DP-3 without additional endorsements, how is a covered loss to the named insured's Coverage C personal property settled?
- 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?
- Which of the following correctly distinguishes the Dwelling Policy from the Homeowners Policy?
- A DP-3 dwelling insured for $300,000 (which equals 100% of its replacement cost) burns to the ground. The loss is total. Ignoring deductibles, what does the insurer pay?
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