Texas General Lines — Property and CasualtyPersonal LinesEasy
A client has a DP-1 Basic Form Dwelling Policy. During a severe thunderstorm, high winds cause a tree to fall onto their detached garage, completely destroying it. The policy has a Coverage B (Other Structures) limit of $10,000. What is the maximum amount the policy will pay for this loss?
- A$0
- B$10,000
- C$1,000
- D$5,000
Show answer & explanationAnswer & explanation
Correct answer: B. $10,000
The DP-1 Basic Form covers damage caused by windstorm. A detached garage falls under Coverage B (Other Structures). Since the damage was caused by a covered peril (windstorm) and is within the Coverage B limit of $10,000, the policy will pay the full $10,000.
Why the other options are wrong
- A. This is incorrect; windstorm is a covered peril under DP-1.
- C. This is incorrect; the limit is $10,000, and the loss is within that limit.
- D. This is incorrect; the limit is $10,000, and the loss is within that limit.
DP-1 Coverage B (Other Structures)
Under a DP-1 Basic Form Dwelling Policy, Coverage B provides coverage for other structures on the insured's premises, such as detached garages or sheds, against perils specifically listed in the policy.
- Coverage B is typically 10% of Coverage A (Dwelling).
- Perils covered are the same as those for Coverage A under DP-1 (Fire, Lightning, Internal Explosion, and EC perils if endorsed).
- Structures must be separated from the dwelling by a clear space or connected only by a fence or utility line.
Memory trick: Remember 'B' for 'Buildings' that are 'B'eside the main house.