West Virginia Property and Casualty Licensing Practice Exam

Which cause of loss form only covers specific named perils?

1. Broad cause of loss form

2. Basic cause of loss form

3. Special cause of loss form

4. All risk form

The correct answer is: Basic cause of loss form

The basic cause of loss form specifically covers named perils, meaning it provides coverage only for those risks explicitly listed in the policy. This type of form is often used for more straightforward coverage needs, where the policyholder desires to have a clear understanding of what is protected. Named perils typically include risks like fire, lightning, explosion, and theft, among others. Since the basic form is limited to these specified events, it allows policyholders to know exactly what is covered, which can make it a suitable option for those who prefer a more conservative approach to insurance. In contrast, the broad cause of loss form extends coverage to additional named perils compared to the basic form, while the special cause of loss form provides coverage for all risks except those specifically excluded in the policy. The all risk form also offers extensive coverage similar to the special cause of loss, further emphasizing that these options cover a wider range of perils than the basic cause of loss form.