South Carolina Personal Lines Practice Exam

Which of the following additional coverages is included without extra premium in an HO policy?

1. Extended replacement cost

2. Fire department service charge

3. Loss of rental income

4. Personal liability coverage

The correct answer is: Fire department service charge

The fire department service charge is included as an additional coverage in a Homeowners (HO) policy without requiring an extra premium. This coverage typically pays for the expenses incurred by the fire department when they respond to a fire at your residence, up to a specified limit. It is designed to address the costs of services that the fire department provides during an emergency, reflecting the general principle that homeowners should have access to essential services that protect their property without financial burden. In contrast, options like extended replacement cost, loss of rental income, and personal liability coverage generally involve additional premiums or specific endorsements beyond the base HO policy, reflecting their nature as enhancements or separable coverages that may not be universally included in every standard homeowner's policy. Understanding the standard inclusions of an HO policy is crucial for homeowners to ensure they have appropriate coverage in place.