South Carolina Personal Lines Practice Exam

What does Coverage D in an HO policy cover?

1. Other structures

2. Personal property

3. Loss of use

4. Dwelling and attached structures

The correct answer is: Loss of use

Coverage D in a Homeowners (HO) insurance policy refers specifically to "Loss of Use" coverage. This coverage is designed to help policyholders who are unable to live in their home due to a covered loss, such as a fire or severe storm damage, that renders their property uninhabitable. With this coverage, the insurance policy will typically pay for additional living expenses incurred while the home is being repaired or rebuilt, such as temporary housing, increased food costs, and other necessary living expenses beyond what you would normally incur if you were living in your home. Understanding this coverage is crucial for homeowners since a loss can lead to significant unforeseen costs while they await repairs. It offers financial protection and peace of mind during a challenging time, allowing homeowners to maintain a semblance of their normal living situation even when faced with substantial home repairs or rebuilding.