West Virginia Property and Casualty Licensing Practice Exam

Coverage D provides coverage for what type of insurance need?

1. Dwelling protection

2. Other structures

3. Fair rental value

4. Personal liability

The correct answer is: Fair rental value

Coverage D is specifically tailored to address fair rental value. This type of coverage comes into play when a rental property becomes uninhabitable due to a covered peril—such as fire, theft, or certain natural disasters. Under these circumstances, the landlord may lose rental income during the repairs, and Coverage D provides compensation for this loss. It ensures that the property owner does not suffer financially from the interruption of income that typically comes from renting out their property. Coverage D is particularly pertinent for those who own rental properties and want to safeguard their financial interests in the event that the property is damaged or destroyed, affecting their ability to collect rent from tenants. The other choices include coverage for physical structures or liabilities rather than income loss from rental properties, making them unsuitable for this specific inquiry about fair rental value.