Study 6 Flashcards
(37 cards)
Why are exclusions needed in a property policy?
To limit the insurer’s risk exposure and clarify what is not covered under the policy.
How do exclusions fit into best practices when reading a policy?
They are part of Step 3: understanding what is not covered and the limitations of coverage.
How do exclusions differ between basic, broad, and comprehensive homeowners forms?
Basic has more exclusions, broad adds some additional coverages, and comprehensive has the fewest exclusions with the widest coverage.
What types of buildings are typically excluded because they are used for business or farming?
Buildings used primarily for commercial or agricultural activities.
Why is property on exhibit excluded?
Because it is exposed to higher risks outside the insured premises.
Why is illegally acquired property excluded?
It is uninsurable and maybe subject to forfeiture.
Why are evidences of debt or title excluded?
Because these are intangible items that cannot be physically insured.
Why are sporting equipment and data excluded under certain conditions?
Due to their specialized nature and potential for wear or data loss.
Why are animals, birds, or fish excluded?
Because they are living creatures and difficult to value or cover for standard perils.
Why are wear and tear, deterioration, or defect excluded?
Because insurance covers sudden, accidental losses, not predictable or gradual damage.
What does faulty design, material, or workmanship exclusion cover?
It excludes damage caused by poor construction or manufacturing flaws.
Are cryptocurrencies and NFTs typically covered?
No, they are excluded due to their intangible and volatile nature.
Why is property lawfully seized excluded?
Because legal seizure by authorities is not an insurable event.
Why are outdoor antennas and satellite receivers excluded?
Because they are exposed to high risk and often not considered part of the main dwelling.
Why are watermains excluded?
Because they are part of public infrastructure, not private property.
Why is property being moved excluded?
Because it is at heightened risk during transit.
Why are vacancy exclusions applied?
Vacant properties face higher risk of damage and vandalism.
Why are nuclear incidents and radioactive contamination excluded?
Because they pose catastrophic, uninsurable risks.
Why are war risks excluded?
Because they involve widespread destruction beyond the scope of private insurance.
Why are intentional or criminal acts excluded?
Insurance does not cover deliberate or illegal actions by the insured.
Why is property being worked on excluded?
Because damage caused by renovations or repairs is not sudden or accidental.
Why is marring, scratching, or chipping excluded?
These are minor damages considered part of normal use.
Why is settling, expansion, or contraction excluded?
Because they are natural property movements, not sudden losses.
Why are pests excluded?
Damage from vermin or insects is considered preventable maintenance.
