For Policyholder L with a DP-1 and a Coverage A amount of $300,000, how much will L's policy pay after a covered loss of $275,000 and a detached swimming pool loss of $30,000?

In the scenario provided, Policyholder L has a DP-1 policy, which is a basic dwelling policy typically used for rental properties or homes that are not owner-occupied. This type of policy covers certain perils but may have some limitations regarding additional structures and losses.

The Coverage A amount of $300,000 pertains to the primary dwelling itself. When a covered loss occurs, such as the $275,000 damage to the dwelling, the policy will pay up to the Coverage A limit. Since the loss amount ($275,000) is less than the Coverage A limit ($300,000), the full loss amount is covered.

Additionally, the loss of the detached swimming pool is not covered by the DP-1 policy because specific structures can be excluded depending on the terms of the policy. Detached structures may be subject to additional coverage limits or not covered at all under a basic policy like the DP-1.

In this case, since the loss to the swimming pool is not accounted for in the coverage, the payment for the covered loss will only reflect the damage to the dwelling. Therefore, L’s policy will effectively pay the full Coverage A amount for the covered loss to the dwelling, which is $275,000.

However, because