Section I Coverages A-D and Additional Coverages
Key Takeaways
- Coverage B is automatically included at 10% of Coverage A, and this amount is additional insurance, not a deduction from Coverage A
- Coverage C is automatically included at 50% of Coverage A (though some carriers allow reduction), and off-premises property gets a reduced sublimit, typically 10% of Coverage C
- Coverage D (Loss of Use) is additional insurance on top of Coverage A and includes Fair Rental Value, Additional Living Expense, and Civil Authority coverage
- Named Additional Coverages like Debris Removal, Trees/Shrubs/Plants, and Loss Assessment each carry their own specific dollar or percentage sublimits distinct from the four main coverage parts
- Ordinance or Law coverage (typically 10% of Coverage A) addresses the gap between what a standard policy pays and what building codes require after a loss
Once a candidate knows which homeowners form applies, the exam pivots to testing the internal architecture of Section I: exactly what each coverage letter pays for, how the coverage amounts relate to one another mathematically, and which narrowly-defined additional coverages exist outside the four main letters. This is dense, detail-heavy material, and the exam rewards precision over general understanding — knowing that Coverage B exists is not enough; you must know it is 10% of Coverage A and that this 10% is additional insurance rather than a sublimit carved out of Coverage A.
Coverage A: Dwelling
Coverage A insures the dwelling on the described premises, including the structure itself and materials and supplies on the premises intended for use in construction, alteration, or repair of the dwelling. Coverage A is the amount the insured selects at the outset (based on replacement cost estimates) and is the base figure from which Coverage B and Coverage C limits are automatically calculated. Attached structures — an attached garage, a sunroom, a deck physically connected to the house — fall under Coverage A, not Coverage B, because Coverage B is reserved for structures separated from the dwelling by clear space.
Coverage B: Other Structures
Coverage B insures structures on the residence premises that are separated from the dwelling by clear space, such as a detached garage, a storage shed, a detached gazebo, or a fence. Coverage B is automatically provided at 10% of the Coverage A limit, and critically, this 10% is additional insurance — it does not reduce the amount available under Coverage A. Coverage B specifically excludes structures used in whole or in part for business purposes and structures rented or leased to a person who is not a tenant of the dwelling itself (though structures rented to an actual tenant of the dwelling are covered). A frequently tested exception: land, including land on which the dwelling is located, is never covered property under any Section I coverage.
Coverage C: Personal Property
Coverage C insures personal property owned or used by an insured while it is anywhere in the world, though property away from the residence premises is often subject to a reduced sublimit (commonly 10% of Coverage C, though this varies by carrier and edition). Coverage C is automatically provided at 50% of the Coverage A limit, and many carriers allow this to be reduced with the insured's consent but not increased beyond the standard percentage without a specific request and adjusted premium. Personal property belonging to guests or residence employees while on the residence premises is also covered, at the insured's request, under the same limit.
Coverage C carries a long list of special limits of liability — sublimits within the overall Coverage C amount for specific categories of property that are expensive or difficult to underwrite accurately, such as cash and coins, securities, watercraft, trailers, jewelry, furs, silverware, firearms, electronic apparatus in vehicles, and business property on or off premises. These special limits exist because a general contents limit calculated as a percentage of the dwelling value is a poor proxy for the true value of concentrated, high-value item categories.
Coverage D: Loss of Use
Coverage D provides additional living expenses if a covered loss makes the residence premises uninhabitable, fair rental value if the insured rents part of the premises to others and that portion becomes uninhabitable, and civil authority coverage if government authorities prohibit access to the residence premises due to direct damage to a neighboring premises from a covered peril (typically for a limited period, such as two weeks). Coverage D is additional insurance on top of Coverage A, meaning a loss under Coverage D does not reduce the dwelling limit. Additional Living Expense is measured as the increase in normal living expenses necessary to maintain the household's normal standard of living, not simply any expense incurred.
Additional Coverages Sublimit Table
| Additional Coverage | Typical Basis/Limit | Key Trigger |
|---|---|---|
| Debris Removal | Additional 5% of Coverage A/B/C if needed | Removing debris of covered property after a covered loss |
| Reasonable Repairs | Included within Coverage A/B limit | Emergency repairs to protect property from further damage |
| Trees, Shrubs, Plants, Lawns | 5% of Coverage A, $500 max per item | Limited named perils only (fire, lightning, explosion, riot, aircraft, non-owned vehicles, vandalism, theft) |
| Fire Department Service Charge | Typically $500 | Charge assessed by a fire department to save/protect covered property |
| Property Removed | Covered against direct loss for 30 days | Property removed from premises endangered by a covered peril |
| Credit Card, Forgery, Fund Transfer Card | Typically $500 | Unauthorized use of insured's credit card or forged checks |
| Loss Assessment | Typically $1,000 | Insured's share of a covered loss assessed by an association/corporation |
| Collapse | Included, specific named causes | Abrupt collapse of a building or part of a building |
| Glass or Safety Glazing Material | Included | Breakage of glass or safety glazing that is part of the building |
| Landlord's Furnishings | Typically $2,500 | Furnishings in an apartment on the residence premises rented to others |
| Ordinance or Law | Typically 10% of Coverage A | Increased cost to rebuild to meet current building codes after a covered loss |
| Grave Markers | Typically $5,000 | Loss to grave markers, including mausoleums, on or away from premises |
Exam Traps to Watch For
The most common Coverage B trap is assuming the 10% comes out of the Coverage A limit — it does not; it is additional insurance layered on top. The reverse trap appears with Debris Removal: candidates assume the 5% additional debris removal amount is unlimited, but it only kicks in as extra coverage when the debris removal expense combined with the amount of loss exceeds the applicable coverage limit; below that threshold, debris removal is paid from within the coverage limit itself. Trees, Shrubs, and Plants coverage is also a favorite trap because it is covered only against a short, specific list of named perils (fire, lightning, explosion, riot or civil commotion, aircraft, vehicles not owned or operated by a resident of the household, vandalism or malicious mischief, and theft) even under an open-peril HO-3 or HO-5 policy — windstorm and most other perils that commonly damage trees are excluded from this particular additional coverage. Ordinance or Law coverage is frequently misunderstood: it does not increase the base Coverage A limit for a normal rebuild; it specifically addresses the incremental cost imposed by current building codes (such as requiring updated electrical wiring or elevated foundations) that would not have been necessary to simply restore the home to its pre-loss condition.
A homeowner carries a $300,000 Coverage A limit. How much automatic Coverage B (Other Structures) protection does the policy provide, and does it reduce the Coverage A limit?
A covered windstorm loss destroys several large trees on the insured's property. Under Section I additional coverages, how does the policy respond?
A condominium association assesses a unit owner $2,500 as their share of a covered loss to a common building element. Which Section I additional coverage responds, and what is its typical standard limit?