Question

True or False? The amounts payable under all of the BPP's coverage extensions and under most of its additional coverages are payable in addition to the limit, which make it possible for the total payment for one loss to exceed the limit.

Answer 1

The statement is true. Insurance policies may have coverage extensions and additional coverages that can provide additional payment on top of the limit, allowing the total payment for one loss to exceed the limit.

Step-by-step explanation:

The statement is true.

In insurance, a limit refers to the maximum amount that an insurance company will pay for a covered loss. However, some insurance policies may have coverage extensions or additional coverages that provide additional payment on top of the limit. This means that the total payment for one loss can exceed the limit.

For example, let's say a policy has a limit of $10,000 for property damage. If the policy has a coverage extension for debris removal that provides an additional $2,000, and if the debris removal cost after a covered loss is $3,000, the total payment for that loss would be $10,000 (limit) + $2,000 (coverage extension) + $3,000 (debris removal cost) = $15,000.