Question

Which of the following statements concerning property insurance is (are) correct?

1) I. Broad named peril policies cover all losses to covered property unless the loss is specifically excluded.
2) II. Insurance policies fall into two categories with respect to covered perils-named perils policies and "all risks" or open perils policies.

Answer 1

Statement I concerning property insurance is incorrect as named peril policies only cover specifically named perils, not all losses except exclusions. Statement II is correct, stating that insurance policies fall into two categories: named perils policies and open perils policies.

Step-by-step explanation:

The student's question pertains to the coverage provided by different types of property insurance policies. When evaluating the correct statements among the options provided, we need to understand the nature of named perils policies and open perils policies. Statement I is incorrect because broad named peril policies only cover the losses from perils that are specifically named in the policy, not all losses except for exclusions. However, statement II is correct because insurance policies indeed fall into two main categories: named perils policies, which cover only the perils listed in the policy, and 'all risks' or open perils policies, which cover all perils unless they are explicitly excluded.

Statement II is correct. Insurance policies can be categorized into two types: named perils policies and 'all risks' or open perils policies. Named perils policies cover only the specific risks or perils that are explicitly listed in the policy. On the other hand, 'all risks' or open perils policies cover all risks or perils except for those that are specifically excluded.