What is true regarding the deductible in the Building and Personal Property Coverage Form?

What is true regarding the deductible in the Building and Personal Property Coverage Form?

• A. The insurer pays regardless of the deductible
• B. The insured must pay the deductible before the insurer covers the remaining loss
• C. The deductible is waived under certain conditions
• D. The deductible applies only to natural disaster claims

Answer: (B)

In the Building and Personal Property Coverage Form, the correct understanding of the deductible is that it requires the insured to pay a specified amount out-of-pocket before the insurance coverage kicks in to cover the remaining loss. This means that if a claim is made, the insurer will subtract the amount of the deductible from the total loss before providing compensation. For instance, if a property has a deductible of $1,000 and suffers a loss valued at $10,000, the insurer will only pay $9,000 after the deductible amount is accounted for. The concept of a deductible serves to prevent small claims and encourages policyholders to take care of their property, as they have a financial stake in the risk. Understanding this principle is essential for anyone studying for the Florida 2-20 Insurance Agent License, as it highlights the responsibilities of both the insurer and the insured in the event of a claim.

In the Building and Personal Property Coverage Form, the correct understanding of the deductible is that it requires the insured to pay a specified amount out-of-pocket before the insurance coverage kicks in to cover the remaining loss. This means that if a claim is made, the insurer will subtract the amount of the deductible from the total loss before providing compensation. For instance, if a property has a deductible of $1,000 and suffers a loss valued at $10,000, the insurer will only pay $9,000 after the deductible amount is accounted for.

The concept of a deductible serves to prevent small claims and encourages policyholders to take care of their property, as they have a financial stake in the risk. Understanding this principle is essential for anyone studying for the Florida 2-20 Insurance Agent License, as it highlights the responsibilities of both the insurer and the insured in the event of a claim.