86. Damage caused by earth movement is excluded by most insurance contracts. Which of the following policies, if any, include coverage for this peril as a standard feature?
Answer: D
FAIR plan includes coverage for damage caused by earth movement as a standard feature.
The FAIR plan, which stands for Fair Access to Insurance Requirements, provides coverage for certain perils, including damage from earth movement, making it a unique option among the choices given.
A) Dwelling policy.
A dwelling policy typically does not include coverage for earth movement. Most standard dwelling policies exclude this peril, requiring homeowners to purchase additional coverage if they wish to protect against damage caused by such events.
B) Personal auto policy.
A personal auto policy is primarily designed to cover vehicles and does not address property damage due to earth movement. This type of policy focuses on automotive risks rather than real estate or structural damage.
C) Standard HO-3 policy.
The standard HO-3 policy is a common homeowners insurance policy that excludes coverage for earth movement. While it covers a wide range of perils, damage from earthquakes and similar earth movements is typically excluded unless additional coverage is specifically purchased.
D) FAIR plan.
The FAIR plan is designed to provide insurance coverage to those who may have difficulty obtaining it through standard insurers. As part of its offerings, it includes coverage for damage caused by earth movement, which differentiates it from the other options.
Conclusion
The FAIR plan is the only option that includes coverage for damage caused by earth movement as a standard feature, highlighting its role in providing essential insurance coverage where other policies fall short. In contrast, the dwelling policy, personal auto policy, and standard HO-3 policy all exclude this peril, making them inadequate for individuals seeking protection against earth movement damage.