Property Insurance FundamentalsQuestion 191 of 215
Under a typical commercial property vacancy provision, what generally happens if the building is vacant for more than 60 consecutive days before a covered loss occurs?
a.All coverage is unaffected; vacancy is never a factor
b.Coverage is fully voided and no claim of any kind can be paid
c.Coverage for certain perils such as vandalism, glass breakage, water damage, theft, or attempted theft is suspended, and the amount paid for other covered losses is generally reduced by a stated percentage (often 15%)
d.The insured must move into the building within 24 hours or coverage ends
Explanation
A typical vacancy clause suspends coverage for several listed perils (commonly vandalism, glass breakage, water damage, theft, and attempted theft) once the building has been vacant for more than 60 consecutive days, and reduces other covered loss payments by a stated percentage (often 15%). The exam answer is not that coverage simply ends, but that it is restricted in these specific ways.
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