North Carolina Adjuster Practice Exam

How much of Cheyenne's losses will be covered under Coverage B - Other Structures after her property is destroyed by a tornado?

1. $90,000

2. $4,700

3. $9,000

4. $1,600

The correct answer is: $9,000

Coverage B - Other Structures specifically provides insurance for detached structures on a property that are not connected to the main dwelling, such as garages, sheds, or fences. In typical homeowners’ policies, this coverage often allows for a set percentage of the dwelling's insured value, commonly around 10%. If Cheyenne’s primary dwelling was insured for a total of $90,000, then Coverage B would generally cover up to $9,000 worth of damage to other structures. This is based on the standard calculation derived from the total coverage amount for the primary building. The loss amount aligns perfectly with the percentage limitation stated in many insurance policies. In this scenario, since the correct answer reflects how much coverage is available for Cheyenne’s detached structures under Coverage B, the calculation and understanding of the typical percentages used in homeowners’ insurance makes it clear why the amount of $9,000 is applicable. Thus, Cheyenne would receive this amount towards the loss of her other structures due to the tornado.