South Carolina Personal Lines Practice Exam

Which of the following is NOT one of the coverages in DP policies?

1. Coverage A - Dwelling

2. Coverage B - Other Structures

3. Coverage D - Fair Market Value

4. Coverage C - Personal Property

The correct answer is: Coverage D - Fair Market Value

The coverage that is not included in the dwelling policy (DP) forms is Fair Market Value. Instead, DP policies typically outline several specific types of coverage related to dwelling and personal property. Coverage A pertains to the dwelling itself, providing protection for the structure where the insured resides. Coverage B covers other structures on the property, such as detached garages or storage sheds, that are not connected to the main dwelling. Coverage C pertains to personal property, which offers protection for the belongings inside the home, like furniture and clothing. Fair Market Value is not a designated coverage type in DP policies. Instead, when discussing property insurance, the valuation is often based on principles such as Actual Cash Value or Replacement Cost, rather than fair market value, which considers the sale price in open market transactions. This distinction highlights why Fair Market Value is not recognized among the standard coverage options in DP policies.