South Carolina Personal Lines Practice Exam

How does the mobile home endorsement affect the coverage of law or ordinance in a homeowners policy?

1. It enhances the coverage

2. It removes the coverage

3. It limits the coverage

4. It has no impact on coverage

The correct answer is: It removes the coverage

The mobile home endorsement generally modifies the policy terms related to a mobile home, which is considered a unique type of dwelling. When it comes to coverage for law or ordinance, this endorsement often removes the coverage that would typically be found in a standard homeowners policy. Law or ordinance coverage provides protection against additional costs associated with rebuilding or repairing a property to comply with current building codes or ordinances after a loss. In the case of mobile homes, there are specific regulations and different building standards that may not align with the coverage that a standard homeowner's policy would provide. Therefore, the endorsement reflects the difference in how these laws apply to mobile homes, leading to the removal of this particular coverage under the mobile home endorsement. This modification acknowledges the unique regulatory environment surrounding mobile homes and allows insurers to tailor coverage appropriately, hence the impact on law or ordinance coverage.