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NM Public Adjuster study materials
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NM Public Adjuster: Property Insurance Coverage Forms and Endorsements

NM Public Adjuster · Work through your exam, one topic at a time.

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Property Insurance Coverage Forms and Endorsements

Domain 4 - Property Insurance Coverage Forms and Endorsements

This domain tests whether you can pick the right form and read its limits, exclusions, and endorsements before you write an estimate.

Residential and dwelling forms

  • HO-3: open perils on the dwelling, named perils on personal property; the most common New Mexico homeowners form.
  • HO-2 broad named perils; HO-5 open perils on building and contents; HO-4 renters; HO-6 condominium unit owners; HO-8 older or nonstandard homes.
  • DP-1, DP-2, DP-3: dwelling fire forms for rental and non-owner-occupied property, with DP-1 usually paying ACV.
  • Coverage D / loss of use: additional living expense or fair rental value, capped as a percentage of Coverage A and often by time.

Commercial property

CP 00 10 building and personal property, paired with a causes-of-loss form: CP 10 10 basic, CP 10 20 broad, CP 10 30 special. Watch coinsurance, blanket limits, agreed value, reporting forms, and business income (CP 00 30) with its period of indemnity.

Endorsements and recurring issues

Ordinance or law, water backup, equipment breakdown, spoilage, debris removal, mortgage clause, replacement cost, vacancy, mold, and matching of undamaged materials.

Standard exclusions

Flood (surfaces outside the building), earth movement, neglect, intentional loss, wear and tear, and faulty workmanship - each with its own ensuing-loss wording. Flood coverage generally comes from the NFIP or a private flood policy, not the homeowners form.

Worked example

An HO-3 shows Coverage A of $400,000 and Coverage D at 30%. The limit is $120,000. Normal living expenses were $2,600 monthly; temporary rent plus added costs run $3,900, so monthly ALE is $1,300. Eight months of repairs produces $10,400 - well inside the limit. If the insured also claims lost rent from a tenant, do not double count the same dollars.

Traps that cost marks

  • Paying replacement cost before the insured repairs or replaces.
  • Missing the ordinance-or-law endorsement when code upgrades drive the scope.
  • Confusing flood with water backup or burst-pipe damage.