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 is specifically designed to provide insurance coverage for risks that are often excluded by standard policies, including damage caused by earth movement. This makes it a unique option for individuals seeking coverage in high-risk areas.
A) Dwelling policy.
A dwelling policy typically does not cover damage from earth movement, as this peril is usually excluded from standard homeowners insurance. These policies generally focus on structures and personal property without the additional coverage for earth-related damages.
B) Personal auto policy.
A personal auto policy is primarily concerned with vehicle-related risks and does not include coverage for property damage resulting from earth movement. This type of insurance is focused on cars and their operation rather than real estate hazards.
C) Standard HO-3 policy.
The standard HO-3 policy, which is the most common homeowners insurance, explicitly excludes earth movement damages such as earthquakes and landslides. While it provides broad coverage for various perils, it does not extend to this particular risk.
D) FAIR plan.
The FAIR plan is designed to provide coverage for high-risk properties and includes earth movement as a standard feature. This makes it a vital option for policyholders in areas susceptible to such natural events, ensuring they have necessary protection.
Conclusion
The FAIR plan is the only policy listed that includes coverage for damage from earth movement as a standard feature, making it essential for those at risk. Other options, including the dwelling policy, personal auto policy, and standard HO-3 policy, do not provide this coverage, highlighting the unique value of the FAIR plan in insuring against such perils.