Question

Which of the following statements about the insurer's obligation to provide a legal defense under the personal liability coverage (Coverage E) of the homeowner's policy is (are) true?

A) The insurer μst always provide a legal defense.
B) The insurer may deny a legal defense based on policy conditions.
C) The insurer's obligation for a legal defense is limited.
D) All of the above statements are true.

Answer 1

The statement the insurer's obligation to provide a legal defense under the personal liability coverage (Coverage E) of the homeowner's policy is B) The insurer may deny a legal defense based on policy conditions.

Step-by-step explanation:

Under the personal liability coverage (Coverage E) of a homeowner's policy, the insurer's obligation to provide a legal defense is not unconditional. The insurer may deny a legal defense based on specific policy conditions and circumstances. These conditions could include situations where the policyholder's actions fall outside the scope of coverage or if there are exclusions mentioned in the policy.

It's crucial to recognize that the obligation for a legal defense is not always absolute, and the insurer's decision may be influenced by the terms and conditions outlined in the policy.

In summay, option B is the correct statement. The insurer may deny a legal defense based on policy conditions.