3.2 Dwelling Coverages A-E and Other Coverages

The Coverage Letters

The dwelling form uses A through E for property. Liability (L) and medical payments (M) are added separately and are NOT part of the base form.

How the Percentages Interact

Coverage B is included within the program: on the unendorsed form, the 10% Other Structures amount is part of, not in addition to, the Coverage A limit. To restore the full Coverage A limit, the insured can buy additional Coverage B with a separate limit.

The loss-of-use coverages (D and E together) share one pool:

Exam trap: D and E share a single percentage; they are not each a separate 20%. On a $300,000 DP-3, the combined D + E pool is $60,000, allocated between lost rent and additional living expense as the loss requires.

Worked Numeric: Other Structures and Loss of Use

A DP-3 has Coverage A = $300,000. The Declarations show no separate Coverage B or C.

• Coverage B (Other Structures) = 10% x $300,000 = $30,000 available for the detached garage.
• Coverage D + E = 20% x $300,000 = $60,000 for lost rent plus extra living cost.
• If a fire destroys the detached garage ($45,000 to rebuild), the policy pays only $30,000 unless additional Coverage B was scheduled — a common exam shortfall.

Coverage C Off-Premises

When Coverage C is purchased, personal property is covered at the described location and worldwide off-premises up to 10% of the Coverage C limit. If Coverage C is $40,000, then property temporarily away from the home is covered to $4,000 — important for a landlord storing supplies elsewhere.

Other Coverages (Sub-Limits)

The dwelling form bundles several small Other Coverages that pay in addition to the main letters, each with its own cap:

• Debris removal — pays to remove debris of covered property after a covered loss.
• Reasonable repairs — temporary repairs to protect property from further damage.
• Property removed — covered against direct loss for 30 days while removed to protect it from a covered peril.
• Fire department service charge — up to $500, no deductible applied.
• Trees, shrubs, plants, and lawns — up to 5% of Coverage A, but no more than $500 per item, and only for listed perils (fire, lightning, explosion, riot, aircraft, vehicles not owned by an occupant, vandalism, theft).

Worked Numeric: Trees and Shrubs

A DP-3 with Coverage A = $300,000 loses three ornamental trees ($800, $600, and $450) when a non-occupant's vehicle strikes them.

• Overall cap: 5% x $300,000 = $15,000 (not a constraint here).
• Per-item cap: $500 each. The trees pay $500 + $500 + $450 = $1,450 — the two larger trees are each capped at $500, while the $450 tree pays in full.

Exam trap: Wind and ice are NOT covered perils for trees and shrubs under this Other Coverage, even on DP-3. A windstorm that topples a tree onto the lawn produces no tree payment (though resulting building damage is covered).

Coverage A and the Materials Provision

Coverage A insures the described dwelling and structures attached to it, plus materials and supplies located on or next to the described location that are intended for use in constructing, altering, or repairing the dwelling. This is why a homeowner's lumber pile staged for a deck is part of Coverage A, not Coverage C. Equipment and outdoor appliances that service the described location (a built-in air conditioner, a permanently installed generator) are also Coverage A. Detached antennas, signs, and similar items, however, are usually Other Structures.

Distinguishing Coverage B From Coverage A

The Coverage A versus Coverage B line is heavily tested. A structure attached to the dwelling by a continuous foundation or wall is Coverage A; a structure set apart by clear space, or connected only by a fence, utility line, or similar connection, is Coverage B. A breezeway-connected garage built on the same slab is Coverage A; a detached garage 20 feet away is Coverage B. Structures rented to others or used for business carry restrictions — a detached garage rented as a workshop may be excluded from Coverage B unless rented to a tenant of the dwelling as a private garage.

Deductible Application

The dwelling deductible applies per occurrence to the combined Coverage A, B, and C loss, not separately to each coverage. On a single windstorm that damages the dwelling ($30,000) and the detached garage ($8,000), the policy applies one deductible to the $38,000 total. The fire department service charge and certain Other Coverages are exempt from the deductible. Many states also permit percentage deductibles for wind or hurricane (e.g., 2% of Coverage A), which on a $300,000 dwelling equals a $6,000 deductible — far larger than a flat $1,000, and a frequent exam comparison.

Why Optional Contents Matters for Landlords

Because Coverage C is optional, a landlord who furnishes nothing can omit it and pay no contents premium, while one who supplies appliances or laundry equipment should schedule a modest Coverage C limit. Tenant belongings are never covered by the landlord's DP; tenants need their own HO-4 renters policy.