Georgia Adjuster Practice Test

What is the main characteristic of the Landlord's Furnishings additional coverage in a Homeowners policy?

1. It increases the limits of the policy

2. It is considered separate insurance

3. It does not increase the limits of the policy

4. It only covers personal property

The correct answer is: It does not increase the limits of the policy

The main characteristic of the Landlord's Furnishings additional coverage in a Homeowners policy is that it does not increase the limits of the policy. This coverage is specifically designed to protect personal property that belongs to the landlord while it is being rented out. However, it operates within the existing limits of the overall homeowners policy. This means that when a claim is made under this coverage, it will draw from the total limits of the policy rather than adding to it. Thus, it is essential for policyholders to understand that while this coverage provides valuable protection for landlord-owned furnishings in rental properties, it will not extend their overall coverage limit and may require careful consideration when evaluating the adequacy of their policy limits for comprehensive protection. Understanding this characteristic is crucial as it affects how landlords might plan their insurance needs and assess their total coverage amounts, ensuring they are appropriately protected without assuming that additional coverage will broaden their limits.