West Virginia Property and Casualty Licensing Practice Exam

What is the main difference between the basic cause of loss and the broad cause of loss forms?

1. Basic covers additional perils; broad covers named perils

2. Basic covers all risks; broad covers specific named perils

3. Basic covers specific named perils; broad covers additional perils

4. Basic is more comprehensive than broad

The correct answer is: Basic covers specific named perils; broad covers additional perils

The primary difference between the basic cause of loss and the broad cause of loss forms lies in the scope of coverage provided by each. The basic cause of loss form is designed to cover specific named perils, such as fire, lightning, explosion, windstorm, and theft. This means that only the perils explicitly listed in the policy are covered. On the other hand, the broad cause of loss form expands on this coverage by including additional perils that are not covered under the basic form. These additional perils might include risks such as falling objects, weight of snow, ice or sleet, and water damage from the plumbing system. Therefore, the broad form encompasses both the perils found in the basic form and additional ones, making it more comprehensive in terms of coverage. This distinction is important for policyholders when choosing an insurance plan suitable for their needs, as opting for the broad cause of loss can provide them with greater protection against unforeseen risks.