Question

Rich purchases an unendorsed Building and Personal Property Coverage Form (BPP) to cover his small business. A covered loss resulted in $24,000 in damage to Rich's building and $20,000 of debris removal. His policy limit is $100,000 with a $1,000 deductible. The insured calculated the building portion of the loss payment to be $23,000 after applying the deductible. How much will Rich collect from his insured for debris removal

Answer 1

Rich's collection for debris removal under his Building and Personal Property Coverage Form depends on the policy's specific terms for additional coverages like debris removal. The policy's limit is $100,000 with a $1,000 deductible, and the building damage has already been assessed at $23,000.

Step-by-step explanation:

When considering the debris removal for Rich's small business covered under the Building and Personal Property Coverage Form (BPP), it's essential to reference the specifics of the policy regarding coverage limits and additional costs like debris removal. The policy carries a $100,000 limit and has a $1,000 deductible. The student has already calculated the building portion of the loss payment to be $23,000, which accounts for the deductible. Since debris removal is also part of the covered losses, we have to look at the policy provisions for such additional coverages.

Typically, debris removal expenses are covered in addition to the policy limit, but this can vary by policy. Unfortunately, without the specifics of the BPP form, including the terms related to debris removal coverage and any sublimits or special conditions, an exact figure cannot be provided, as these terms are critical to give an accurate answer. Nevertheless, generally speaking, if a policy offers debris removal in addition to the building coverage limit and the total damage (building plus debris removal) does not exceed the total policy limit, Rich might be able to collect the full amount for debris removal.