South Carolina Personal Lines Practice Exam

What is the standard deductible that applies to all property coverages except Fair Rental Value and Additional Living Expense for a DP policy?

1. 100

2. 250

3. 500

4. 1000

The correct answer is: 250

In a dwelling policy (DP), the standard deductible that applies to all property coverages, excluding Fair Rental Value and Additional Living Expense, is typically set at $250. This deductible amount is a fundamental aspect of the policy as it represents the portion of a loss that the insured must pay out-of-pocket before the insurance coverage begins to respond. Using a $250 deductible helps maintain affordability for policyholders while ensuring that insurance companies can manage claims efficiently. It acts as a threshold for smaller claims, often leading to lower premiums since the insurance company is not burdened with processing minor claims. Additionally, this standard deductible is designed to provide a balance, helping to ensure that the policy remains accessible without compromising the policyholder's coverage.