Question

A fire destroyed the home next door to Brad's house. The fire department chief was concerned that the damaged home would collapse onto Brad's house and ordered Brad to evacuate his home. Which of the following statements is true concerning the cost of Brad's hotel room while he is complying with the fire chief's order?

(a) The cost of the hotel room is not covered, as Brad's home was not directly damaged.
(b) The cost of the hotel room is covered under the "fair rental value" coverage of Part D.
(c) The cost of the hotel room is covered under the "prohibited use" coverage of Part D.
(d) The cost of the hotel room is covered under the dwelling coverage of Part A.

Answer 1

The statement that is true concerning the cost of Brad's hotel room while he is complying with the fire chief's order:

Option C: The cost of the hotel room is covered under the "prohibited use" coverage of Part D.

Step-by-step explanation:

Many homeowners insurance policies have a coverage which helps you pay for additional expenses in case of unfortunate incidents like fire. It is called “Loss of Use,” or “Part D,” or “Additional Living Expenses” coverage.

'Prohibited use' is the type of coverage that makes up Loss of Use when government agency or state police stops you from accessing your house because there has been some damage in your neighborhood house because of fire or something. It is possible that there is no damage in your house.

Hence, statement C is the correct one.