North Carolina Adjuster Practice Exam

Which two additional coverages are included within Jim's Coverage A limit on his DP-3 policy?

1. Personal Liability and Additional Living Expenses

2. Debris Removal and Reasonable Repairs

3. Medical Payments and Theft Coverage

4. Loss of Use and Ordinance or Law

The correct answer is: Debris Removal and Reasonable Repairs

The correct answer indicates that the DP-3 policy, also known as the Special Form policy, includes certain coverages within its Coverage A limit, specifically Debris Removal and Reasonable Repairs. Debris Removal is an essential coverage as it protects the insured from the costs associated with removing debris resulting from a covered loss. This can include the cleanup and disposal of debris from the property after, for example, a fire or severe storm. This benefit helps ensure that the property can be properly restored or prepared for future use. Reasonable Repairs, on the other hand, covers the expenses incurred to make temporary repairs to prevent further damage after a covered incident. This can include boarding up windows or making temporary fixes to a roof after damage occurs. The inclusion of this coverage is vital as it allows the property owner to take immediate action to minimize losses, which can help expedite the overall claims process and restoration efforts. Other options may refer to important coverages as well, but they are not included within the limits of Coverage A of the DP-3 policy. For example, personal liability typically has its own separate limits and is not automatically part of the dwelling coverage. Additional living expenses, which cover extra costs incurred when living away from home during repairs, may also not