West Virginia Property and Casualty Licensing Practice Exam

What is considered vacant according to an unendorsed commercial property policy?

1. A building with less than 31% occupancy

2. A completely empty building

3. A lease building with no tenants

4. A building in current use

The correct answer is: A building with less than 31% occupancy

In the context of an unendorsed commercial property policy, a building is generally considered "vacant" if it does not have a certain level of occupancy. Specifically, a building with less than 31% occupancy meets this criterion and is deemed vacant. This is important because the level of occupancy can impact insurance coverage, as insurance companies may view residential or commercial properties with low occupancy as higher risks for certain types of claims. While choices such as a completely empty building might also reflect a state of vacancy, the specific threshold of less than 31% is used by insurers to determine vacancy status in policy terms. Similarly, a lease building with no tenants could imply vacancy, but it is the occupancy rate defined in the policy that is most relevant for this distinction. A building currently in use does not meet the definition of vacancy at all, as it likely has sufficient occupancy. Therefore, the determination of vacancy according to an unendorsed commercial property policy relies specifically on the occupancy percentage, making the first option the correct answer.