South Carolina Personal Lines Practice Exam

Under what condition can broad theft coverage be added to a DP policy?

1. If it is owner-occupied

2. If it is rented

3. If it is vacant

4. If it is a commercial property

The correct answer is: If it is owner-occupied

Broad theft coverage can be added to a Dwelling Property (DP) policy specifically when the property is owner-occupied. This condition is crucial because broad theft coverage is designed to protect an insured's personal belongings against theft within a residence that the insured occupies as their home. Owner-occupied residences generally involve more comprehensive personal property coverage, as the policyholder has a vested interest in protecting their belongings in a primary living space. In contrast, other situations, such as renting, vacant properties, or commercial properties, face different risks and regulatory conditions that may not align with offering this particular type of theft coverage. For example, rented properties often fall under different coverage types due to tenants having different responsibilities and less control over the property. Vacant properties present additional risks for theft that may not be adequately covered under broad theft terms. Additionally, commercial properties usually require specialized coverage that caters to business risks rather than residential theft coverage, making them ineligible for the same broad protections that apply to owner-occupied homes.