South Carolina Personal Lines Practice Exam

What is the coverage limit for Tenants' Improvements, Alterations, and Additions?

1. Up to 5% of personal property limit

2. Up to 10% of personal property limit

3. Up to 15% of personal property limit

4. Up to 20% of personal property limit

The correct answer is: Up to 10% of personal property limit

Tenants' Improvements, Alterations, and Additions coverage is designed to protect the policyholder's investments made to improve or alter a rented space. In most personal lines policies, the coverage limit is typically set at up to 10% of the personal property limit. This means that if a tenant has made enhancements such as adding fixtures, renovating a space, or installing new equipment, they can claim reimbursement for these costs, but only up to the specified percentage of their overall personal property coverage. This limit ensures that tenants have a safeguard for customizations that might otherwise be lost at the end of their lease or in the event of a loss. Understanding this coverage is critical for tenants who invest in improvements to their rented properties, as it defines the extent of their financial protection.