Georgia Property & Casualty Practice Exam

What is the status of theft coverage in a new dwelling policy?

1. Theft is covered in all DP forms without an endorsement.

2. Theft coverage requires an endorsement in all DP forms.

3. A DP 3 covers theft without an endorsement; DP 1 and DP 2 need one.

4. Theft is never covered in dwelling policies.

The correct answer is: Theft coverage requires an endorsement in all DP forms.

In the context of dwelling policies, theft coverage operates under specific provisions. The correct answer indicates that theft coverage necessitates an endorsement in all dwelling policies, which aligns with how these policies are structured. Dwelling policies are designed primarily for properties that are not owner-occupied and focus on coverages pertaining to the dwelling itself and the structures on the property. Unlike homeowner policies, which typically include a broader range of coverage including theft, dwelling policies require additional endorsements to provide this type of protection. Therefore, to have theft coverage under a dwelling policy, policyholders must specifically obtain and pay for a theft endorsement, regardless of the form of the policy they choose (DP-1, DP-2, or DP-3). This situation underscores the necessity of applicants being aware of the limitations of coverage within dwelling policies and the need for endorsements to fill those gaps, particularly regarding risks like theft. Understanding this structure helps individuals who are considering a dwelling policy ensure that they have adequate protection for potential losses due to theft, as it is not automatically included in standard forms.