Question

Statutory Conditions or Commercial Property conditions Policy conditions. What are 3 additional conditions contained in a number of commercial property forms, and explain the effect of each?

a. Coinsurance condition - encourages policyholders to insure property adequately
b. Subrogation condition - allows the insurer to pursue third parties responsible for a loss
c. Vacancy condition - limits coverage when a property is unoccupied for an extended period
d. Cancellation condition - outlines the conditions under which the policy can be canceled

Answer 1

The three additional conditions contained in a number of commercial property forms are coinsurance condition, subrogation condition, and vacancy condition. The correct option is a.

Step-by-step explanation:

Three additional conditions contained in a number of commercial property forms are coinsurance condition, subrogation condition, and vacancy condition.

The coinsurance condition encourages policyholders to insure their property adequately. It requires the policyholder to have insurance coverage equal to a specified percentage of the property's value in order to receive full claim payments.

The subrogation condition allows the insurer to pursue third parties responsible for a loss. If the insurer pays a claim, they may seek reimbursement from the responsible party.

The vacancy condition limits coverage when a property is unoccupied for an extended period. It usually reduces or eliminates coverage for certain risks, such as vandalism or water damage, to motivate property owners to maintain occupancy. The correct option is a.