South Carolina Personal Lines Practice Exam

Which type of coverage under the dwelling policy pays for renting an apartment due to damage?

1. Coverage C - Personal Property

2. Coverage E - Additional Living Expenses

3. Coverage D - Fair Market Value

4. Coverage B - Other Structures

The correct answer is: Coverage E - Additional Living Expenses

The correct answer is Coverage E - Additional Living Expenses. This coverage is specifically designed to help policyholders cover the costs incurred when they need to move temporarily due to a covered peril that damages their home. For instance, if a dwelling becomes uninhabitable due to fire or another covered event, Coverage E will pay for necessary expenses such as rent for an apartment, hotel stays, or additional costs that arise from living away from home while repairs are being made. This coverage ensures that policyholders can maintain their standard of living during the recovery process without facing financial strain. It is an essential component that provides peace of mind, knowing that there is support available if the home becomes unlivable.