South Carolina Personal Lines Practice Exam

Coverage D Fair Rental Value and Coverage E Additional Living Expenses can only be added if which coverage is written?

1. Coverage A

2. Coverage B

3. Coverage C

4. Coverage D

The correct answer is: Coverage A

Coverage D, which pertains to Fair Rental Value, and Coverage E, associated with Additional Living Expenses, are typically extensions of coverage that apply when there is a loss that makes a property uninhabitable or affects rental income. These coverages are contingent upon having Coverage A, which is the dwelling protection. Coverage A provides essential protection for the physical structure of the home itself. If there is a covered peril causing loss or damage to the dwelling, this creates the need for Fair Rental Value or Additional Living Expenses. For instance, if a homeowner's residence becomes uninhabitable due to a fire, having Coverage A in place would trigger the need for compensation under Coverage D and Coverage E, as the insurance would account for the resultant loss of rental income and living expenses while the home is being repaired. In summary, Coverage D and Coverage E serve as supplementary aids for policyholders facing issues directly related to a covered loss to the insured dwelling under Coverage A. This reaffirms the importance of Coverage A as the foundational coverage necessary for these additional benefits.