South Carolina Personal Lines Practice Exam

Under what condition do Coverages D and E apply?

1. If the property under A, B, C is damaged by a non-covered peril

2. If the property has no insurance coverage

3. If the property under A, B, C becomes damaged by a covered peril

4. If additional coverage is purchased

The correct answer is: If the property under A, B, C becomes damaged by a covered peril

Coverages D and E are specifically designed to provide benefits when there has been damage to property covered under Coverages A, B, and C due to a peril that is recognized as covered by the policy. When a peril that is listed in the policy causes damage to the dwelling (Coverage A), other structures (Coverage B), or personal property (Coverage C), it triggers the provisions of Coverages D and E, which typically cover loss of use and personal liability, respectively. Coverage D usually pertains to additional living expenses incurred if the insured premises become uninhabitable due to a covered loss. Coverage E provides personal liability protection for damages resulting from bodily injury or property damage to third parties. Thus, in circumstances where property under A, B, or C becomes damaged from a peril that is covered by the policy, the insured is eligible to receive benefits under Coverages D and E as a result of that covered loss. This reinforces the idea that these coverages are contingent upon a triggering event that falls within the scope of what is protected by the primary coverage.