West Virginia Property and Casualty Licensing Practice Exam

What broad classification does the special cause of loss form belong to?

1. Open peril form

2. Named peril form

3. Basic coverage form

4. Extended coverage form

The correct answer is: Open peril form

The special cause of loss form belongs to the classification of an open peril form. This type of policy provides coverage for all perils except those specifically excluded in the policy wording. Essentially, it offers the most comprehensive level of protection, as it covers any potential risks unless they are explicitly named as not covered. This contrasts with named peril forms, which only cover specifically listed risks; thus, they are more limited in scope. In this context, recognizing the broad classification is crucial for understanding how insurance policies differ in terms of the scope of coverage. An open peril form allows for greater flexibility and security, making it a preferred choice for insured parties who want extensive protection for their assets.