Compared to a basic form, a broad form property policy generally provides more coverage of risks by including more perils.

Compared to a basic form, a broad form property policy generally provides more coverage of risks by including more perils.

• A. Higher premiums
• B. Greater coverage of risks (perils)
• C. Fewer insureds
• D. Less coverage

Answer: (B)

Perils are the events that cause a loss and are the basis of what a policy covers. A basic form lists a limited set of named perils, while a broad form adds more perils to that list. Because more perils are covered, the broad form provides greater coverage of risks. While broader protection can lead to higher premiums, the key idea is the expansion of perils covered, not a reduction in coverage or insurability.

Perils are the events that cause a loss and are the basis of what a policy covers. A basic form lists a limited set of named perils, while a broad form adds more perils to that list. Because more perils are covered, the broad form provides greater coverage of risks. While broader protection can lead to higher premiums, the key idea is the expansion of perils covered, not a reduction in coverage or insurability.