South Carolina Personal Lines Practice Exam

Which of the following risks is generally excluded from a DP-1 policy?

1. Fire

2. Earth movement

3. Lightning

4. Vandalism

The correct answer is: Earth movement

A DP-1 policy, also known as the Dwelling Policy - Basic Form, typically provides coverage for basic perils, including fire and lightning. However, it generally excludes coverage for certain risks that are considered broader environmental hazards. Earth movement, which includes earthquakes, landslides, and other earth-related activities, falls into this category and is not covered under a DP-1 policy. This exclusion is significant as the policy is designed to offer a more basic level of protection, and earth movement is considered a higher-risk peril that usually requires separate coverage options or endorsements. In contrast, fire and lightning are specifically included in the basic coverage of the DP-1 policy, making them essential protections for property owners, while vandalism can be included based on the specific terms of the policy and any optional coverages selected. Understanding these distinctions helps policyholders make informed decisions about their coverage needs and adequately protect their properties from various risks.