Insuring one residence with multiple buildings
Coverage Q&A: How does coverage apply to the insured's residence, which consists of three separate buildings.
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Question: Our insured has a dwelling policy covering a one-family concrete building.
However, our insured has an unconventionally designed home. The house consists of three unconnected structures. The main building includes a kitchen, living room and bathroom; the two other buildings contain the bedrooms of the house.
Are the three buildings covered under coverage A of the dwelling policy or is only the main building covered? Since the two bedrooms are set apart from the main building by a clear space, we believe they should fall under coverage B.
— Puerto Rico Subscriber
Answer: This is an interesting question. You are correct; since the bedrooms are separate buildings, they should be covered as coverage B. There is nothing in the ISO manual addressing separate buildings as other than coverage B unless they are at a separate location, in which case a separate dec page is needed for each location, this is rule 204. Rule 205 states that insurance may be provided on the same location by two or more policies under one or more companies, which, while it seems to be intended for multiple companies, it could apply to one company as well.
I see no endorsement to raise the limit of coverage B; coverage B is 10% of the coverage A limit. If you’ve had a loss, the insured may be short on funds, as the value of the bedrooms may be more than 10% of coverage A. If you’re writing a new policy with this, you may need to put multiple policies on it to properly cover the bedrooms; it really depends on the values at hand. This is something to discuss with underwriting as to how they want to cover it.
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