Question

Which of the following statements is NOT TRUE regarding the Dwelling Under Construction endorsement to a Dwelling policy?

a.The Dwelling Under Construction endorsement, also known as home under construction insurance, is designed for home construction projects that are expected to take no longer than a month or two.
b.It covers risks such as fire, storm damage, burst pipes, theft, and other covered perils. Additionally, it may include soft costs associated with construction delays, building materials, and premises liability.
c.The limit the endorsement will pay at any given time in the construction process is 25%, 50%, or 75%.
d.Unlike builders risk insurance, which is an entirely separate policy purchased by you or your contractor for more extensive construction projects or new home builds, the Dwelling Under Construction endorsement is an add-on to your existing homeowners policy.

Answer 1

The NOT TRUE statement regarding Dwelling Under Construction endorsement is that it is intended for construction projects of no longer than one to two months. This is incorrect as these endorsements cover longer construction periods without such strict time constraints.

Step-by-step explanation:

The statement that is NOT TRUE regarding the Dwelling Under Construction endorsement to a Dwelling policy is: "The Dwelling Under Construction endorsement, also known as home under construction insurance, is designed for home construction projects that are expected to take no longer than a month or two." This statement is not accurate because Dwelling Under Construction endorsements are typically designed for projects that span longer periods, and there is no such strict timeframe of one to two months implied in most construction insurance policies. Instead, these policies cover various risks throughout the construction period, but they do not restrict the insurance coverage to such a short duration.

Moreover, this endorsement provides coverage for risks during the construction process which might include fire, storms, theft, and other covered perils. It also offers protection for soft costs which are non-tangible costs associated with delays in construction.

Finally, it is true that the endorsement can payout at different limits such as 25%, 50%, or 75% depending on the policy's terms, and that it is distinct from builders risk insurance. Builders risk insurance is a separate policy, while the Dwelling Under Construction endorsement is an add-on to an existing homeowners policy.