South Carolina Personal Lines Practice Exam

What percentage of Coverage A does Coverage B provide in a Dwelling Policy?

1. 5%

2. 10%

3. 15%

4. 20%

The correct answer is: 10%

In a Dwelling Policy, Coverage B, which pertains to Other Structures, provides coverage equal to 10% of the amount of Coverage A, which is applicable to the main dwelling itself. This coverage is designed to protect structures on the property that are not attached to the primary dwelling, such as garages, sheds, or fencing. The reason this percentage is set at 10% is to ensure that homeowners have a baseline level of protection for additional structures while still primarily focusing coverage on the main dwelling. This reflects a standard approach in many policies, allowing for adequate coverage without overwhelming the insured with excessive limits for less frequently used structures. Understanding this percentage is crucial for policyholders to manage their risks effectively and ensure they are adequately protected against potential damages to both their main residence and other structures on their property.