Which of the Following Statements About Coverage for Loss of Use

question 34

Multiple Choice

Which of the following statements about coverage for loss of use (Coverage D.under the Homeowners 3 policy is true?

• A)If a covered loss makes the home unfit for living,the insurer pays additional living expenses the insured may incur as a result of the loss.
• B)The duration of payments for additional living expenses is limited to a maximum of 30 days.
• C)There is no coverage for loss of rent if an insured peril makes the part of the premises rented to others uninhabitable.
• D)There is coverage for loss of business income if an insured peril forces a home business to be terminated.

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Definitions:

Operating Cost

Expenses associated with the day-to-day activities of running a business, excluding costs related to financing and investments.

Useful Life

The period of time over which an asset is expected to be useful in the operations of a business.

Traceable Fixed Expense

A fixed expense that can be directly linked to a specific department, project, or segment of a business.

Net Operating Income

The amount of profit realized from a company's operations after subtracting operating expenses but before interest and taxes.