South Carolina Personal Lines Practice Exam

How is the amount of coverage for Coverage B - Other Structures determined?

1. 5% of Coverage A

2. 10% of Coverage A

3. 15% of Coverage A

4. 20% of Coverage A

The correct answer is: 10% of Coverage A

In a standard homeowners insurance policy, Coverage B provides protection for other structures on the property that are not attached to the main dwelling, such as fences, sheds, or detached garages. The amount of coverage for this section is typically set as a percentage of Coverage A, which represents the dwelling coverage. The standard provision in most homeowners policies designates Coverage B at 10% of the amount of Coverage A. Therefore, if a homeowner has a dwelling insured for a certain amount, Coverage B automatically provides coverage for other structures that is equal to 10% of that amount. This means that if the main home is insured for $300,000, the coverage for other structures would automatically be $30,000. This standardization helps homeowners understand the extent of their coverage without needing to specify amounts for each part of the policy, ensuring that there is a reasonable amount of protection for both the dwelling and the other structures on the property.