South Carolina Personal Lines Practice Exam

How much does the Rental Value/Additional Living Expense Coverage Extension cover?

1. Up to 10% of Coverage A

2. Up to 20% of Coverage A

3. Up to 30% of Coverage A

4. Up to 50% of Coverage A

The correct answer is: Up to 20% of Coverage A

The Rental Value/Additional Living Expense Coverage Extension provides essential coverage for policyholders who find themselves temporarily unable to live in their home due to a covered loss. Specifically, this extension is designed to compensate for losses incurred because the dwelling is uninhabitable, offering support for additional expenses like temporary accommodations or rental payments for a period. In South Carolina, this coverage typically is limited to up to 20% of the Coverage A amount, which represents the dwelling's insured value. This means if a covered peril renders the home unlivable, the policyholder can receive reimbursement for living expenses or loss of rental income up to this specified limit. It is important for policyholders to understand this coverage, as it can provide significant financial relief during an unexpected event, allowing them to maintain a reasonable standard of living while their home is being repaired or rebuilt.