Dwelling Policy Practice Test

A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true?

1. Loss by vandalism and malicious mischief is covered

2. Loss by vandalism and malicious mischief is excluded

3. Coverage remains intact for all losses

4. There is no limit on vacancy coverage

The correct answer is: Loss by vandalism and malicious mischief is excluded

When a dwelling is vacant for a certain period, specifically more than 60 consecutive days, many insurance policies, including dwelling policies, impose restrictions on coverage, particularly regarding vandalism and malicious mischief. This is due to the increased risk that vacant properties face, as they can be more susceptible to these types of loss. In this case, since the house has been vacant for 70 days, the statement indicating that loss by vandalism and malicious mischief is excluded is accurate. Most dwelling policies explicitly state that losses due to vandalism and malicious mischief are not covered during periods of vacancy exceeding the stipulated timeframe, typically 60 days. This exclusion is designed to mitigate the insurer's risk associated with properties that become targets due to their unoccupied status. Other options involve misinterpretations of coverage terms. The statement about coverage remaining intact for all losses doesn't take into account the vacancy clause that alters the coverage terms significantly. Similarly, mentioning that there is no limit on vacancy coverage undermines the common exclusions that apply after a specified number of days of vacancy.