Study guide
3.2 Dwelling Coverages A-E and Other Coverages
Arkansas Property & Casualty Insurance State
Track your progress as you read
Finished sections get a check mark.
1 Standalone Coverage Map
Standalone Coverage Map
2 Introduction: Arkansas Property & Casualty Insurance Exam Overview
Arkansas Property & Casualty Exam Overview
3 National Portion: Insurance Fundamentals
1.1 Risk, Hazards, Perils, and the Law of Large Numbers 1.2 Insurable Interest, Indemnity, and Other Insurance Principles 1.3 Insurance Contract Law and Elements 1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions 1.5 Parties, Agents vs. Brokers, and Authority
4 National Portion: Property Insurance Concepts
2.1 Causes of Loss / Named-Peril vs. Open-Peril 2.2 Valuation: ACV, Replacement Cost, and Functional Value 2.3 Coinsurance and the Coinsurance Formula 2.4 Deductibles, Limits, and Loss Settlement 2.5 Common Property Policy Conditions and Clauses
5 National Portion: Dwelling Policies (DP)
3.1 Dwelling Policy Forms DP-1, DP-2, DP-3 3.2 Dwelling Coverages A-E and Other Coverages 3.3 Dwelling Perils, Conditions, and Endorsements 3.4 Mobile Home and Specialized Dwelling Coverage
6 National Portion: Homeowners Policies - Forms & Section I
4.1 Homeowners Forms HO-2 through HO-8 and Eligibility 4.2 Section I Coverages A-D and Additional Coverages 4.3 Section I Perils Insured Against and Exclusions 4.4 Replacement Cost vs. ACV and Loss Settlement in Homeowners
7 National Portion: Homeowners Policies - Section II & Endorsements
5.1 Section II Coverages E (Liability) and F (Medical Payments) 5.2 Homeowners Conditions and Duties After Loss 5.3 Common Homeowners Endorsements (scheduled property, water backup, ordinance or law)
8 National Portion: Personal Auto Policy - Liability & Injury
6.1 Personal Auto Policy Structure and Eligibility 6.2 Part A Liability and Supplementary Payments 6.3 Part B Medical Payments 6.4 Part C Uninsured/Underinsured Motorists
9 National Portion: Personal Auto Policy - Physical Damage & Duties
7.1 Part D: Coverage for Damage to Your Auto 7.2 Exclusions and Part E: Duties After an Accident 7.3 Part F: General Provisions, Endorsements, and No-Fault Concepts
10 National Portion: Liability Insurance Concepts
8.1 Negligence, Torts, and Legal Liability 8.2 Defenses, Damages, and Vicarious Liability 8.3 Occurrence vs. Claims-Made Triggers 8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury
11 National Portion: Commercial Property Insurance
9.1 Commercial Package Policy Structure and Common Policy Conditions 9.2 Building and Personal Property Coverage Form (BPP) 9.3 Causes of Loss Forms (Basic, Broad, Special) 9.4 Business Income and Extra Expense 9.5 Commercial Property Endorsements and the BOP
12 National Portion: Commercial General Liability - Coverages
10.1 CGL Coverage A: Bodily Injury and Property Damage Liability 10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments 10.3 Who Is an Insured and Supplementary Payments
13 National Portion: Commercial General Liability - Limits, Triggers & Exclusions
11.1 CGL Limits of Insurance and Aggregates 11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates 11.3 Key CGL Exclusions and Endorsements
14 National Portion: Commercial Auto Insurance
12.1 Business Auto Coverage Form and Covered Auto Symbols 12.2 Commercial Auto Liability and Physical Damage 12.3 Motor Carrier / Trucking and MCS-90 12.4 Garage Coverage Form and Garagekeepers 12.5 Commercial Auto Endorsements
15 National Portion: Workers Compensation
13.1 Workers Compensation Statutory Background and Benefits 13.2 Part One (Workers Comp) and Part Two (Employers Liability) 13.3 Premium Basis, Experience Modification, and Classification 13.4 Other States, USL&H, and Federal Acts 13.5 Workers Comp Exclusions and Endorsements
16 National Portion: Other Commercial Lines - BOP, Crime & Marine
14.1 Businessowners Policy (BOP) in Depth 14.2 Crime and Fidelity Coverage 14.3 Inland Marine and Nationwide Marine Definition 14.4 Ocean Marine Coverages (Hull, Cargo, Freight, P&I)
17 National Portion: Other Commercial Lines - Specialty & Professional
15.1 Farm and Agricultural Coverage 15.2 Commercial Umbrella and Excess Liability 15.3 Professional Liability and Errors & Omissions 15.4 Directors & Officers and Employment Practices Liability
18 National Portion: Other Commercial Lines - Surety, Flood & Specialty
16.1 Surety and Fidelity Bonds 16.2 National Flood Insurance Program (NFIP) 16.3 Cyber, Aviation, and Other Specialty Lines
19 National Portion: Insurance Regulation & Market Conduct
17.1 State Regulation, Licensing, and the McCarran-Ferguson Act 17.2 Rates, Forms, Solvency, and Guaranty Associations 17.3 Producer Authority, Fiduciary Duty, and Company Operations
20 National Portion: Ethics & Unfair Trade Practices
18.1 Unfair Trade Practices and Unfair Claims Settlement 18.2 Producer Ethics, Errors & Omissions Exposure, and Fiduciary Conduct 18.3 Privacy, Fraud, and Consumer Protection
21 Chapter 1: Arkansas P&C Insurance Regulation & Licensing
1.1 Arkansas Insurance Department 1.2 Arkansas P&C Producer Licensing Requirements 1.3 Arkansas Producer Responsibilities
22 Chapter 2: Arkansas Property Insurance
2.1 Arkansas Homeowners Insurance 2.2 Arkansas Commercial Property Insurance
23 Chapter 3: Arkansas Casualty & Auto Insurance
3.1 Arkansas Auto Insurance Requirements 3.2 Arkansas Liability Insurance 3.3 Arkansas Workers' Compensation Insurance
24 Chapter 4: Arkansas Ethics & Professional Conduct
4.1 Ethical Practices and Consumer Protection
3.2 Dwelling Coverages A-E and Other Coverages
Key Takeaways Explain This Topic AI
Dwelling coverages are lettered A (Dwelling), B (Other Structures), C (Personal Property, optional), D (Fair Rental Value), and E (Additional Living Expense) — different from homeowners lettering.
Coverage B (Other Structures) carries an automatic limit of 10% of Coverage A on the dwelling form, and using it reduces the Coverage A limit available unless written as additional insurance.
Coverages D and E combined are limited to 20% of Coverage A on DP-2/DP-3 (10% on DP-1), and they pay only for the time reasonably required to repair or replace.
Coverage C personal property is optional on the DP and, when written off-premises, follows the named insured's belongings worldwide subject to a 10% limit cap.
Other Coverages provide small sub-limits for debris removal, reasonable repairs, property removed, fire department service charge ($500), and trees/shrubs/plants (5% of Coverage A, $500 per item).
Last updated: June 2026
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.
Coverage What It Insures Automatic Limit
A – Dwelling The described residence and attached structures, materials/supplies for construction The Declarations limit
- B – Other Structures Detached garage, shed, fence 10% of Coverage A
- C – Personal Property Insured's contents (optional) The limit shown; off-premises capped at 10% of the C limit
- D – Fair Rental Value Lost rent on rented portions See D/E cap below
- E – Additional Living Expense Owner-occupant's extra living costs See D/E cap below
- 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:
- Form Combined D + E Limit
- DP-1 10% of Coverage A
- DP-2 / DP-3 20% of Coverage A
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.